You Can’t Build Wealth in Financial Chaos

brought to you by the every dollar app start budgeting for free today normal is broken common sense is weird so we're here to help you transform your life from the ramsey network and the fair winds credit union studios this is the ramsey show i'm dave ramsey george camel number one best-selling author ramsey personality is my co-host today katie is in harrisburg pennsylvania hi katie how are you i'm wonderful how are you better than i deserve what's up okay i have a question so i am working insane amounts and i just can't seem to i enough is never enough there's there's just never enough money for the end of the month if i can't afford my credit card payments what do i do like do i just not pay them like i obviously i want to pay them because it's my debt and i and i racked it up but what do i do because i know you always say pay your necessities first well there's not enough money help okay well i always say pay your necessities first because you should pay your necessities first you should buy food before you pay your credit card yes you should buy lights and water and pay your rent before you pay your credit card yeah if you're running out of money let's get to the bottom of that and figure out what's going on you're working hard you're not scared to work you establish that right so what do you what do you make at your main job and what are you making overall okay so my main job i make about thirty five hundred dollars a month because i get i get paid one time a month and then i have a second job that i make about six hundred dollars every other week and that depends on how that's a part-time job but it depends on how many extra hours i pick up okay so you got a lot of time to do that so i'm forty seven hundred dollars coming in how much is your rent um my mortgage it's a mortgage and my husband my husband makes about four hundred twenty dollars a week okay i'm sorry okay so you got forty seven hundred plus um sixteen eighty another seventeen hundred right correct okay so so now we're at sixty four hundred right yes okay yeah and your house payment is how much it's a thousand sixty nine okay not the problem all right and how much are the car payments uh. i have my my vehicle is uh. it's i think i usually pay with my my second job money it's three hundred dollars every other week you have a six hundred dollar car payment and what do you owe on the six hundred dollar car payment how much money do you pay off five thousand eight hundred dollars okay and what about his car it's it's paid for all right and what other debt do we have uh. i have a i have a four oh one loan that is three hundred and fifty one dollars and the balance it's about forty six hundred dollars that we paid off next december uh. i have another loan because of my you know consolidation loan because that was a good idea uh. that no one ever it's got six hundred and seventy one dollars and that will be paid off may of twenty nine six hundred seventy one dollars a month a month and the balance on the consolidation loan is what is uh. eighteen thousand so eighteen k forty six hundred fifty eight hundred are there credit cards on top of that oh there are yeah there are what's the total in credit card debt around twenty three thousand okay eighteen plus five or eighteen plus twenty three eighteen plus twenty three so you've been living out of control for a while yes and credit card has been catching your out-of-control chaos instead of fixing it correct because you really don't have a lot of debt until we got to that uh. so what do you think you're spending all this money on because there's a lot of money just disappearing in these numbers correctly exactly exactly uh. where do you think it's going in in honestly it's uh. i live a very very simple life i'd i'd somebody doesn't don't i'd obviously yes it's definitely not me around here i'd i'd i mean it's not as far as like food and gas and like what i mean i don't i don't live lavishly like i don't i mean my daughter is she's a person she she does a sport uh. but that's that's about it honestly about it my oldest daughter she self-sufficient uh. she's twenty years old she you know she she pay for her own thing she works she she goes to college like so i don't have to pay much for her and she does pay for her portion of the question about what's up so if i take sixty four hundred and i pay a six one thousand sixty nine dollar house payment not pay a six hundred dollar car payment still got a lot of money left over my gas bill three hundred dollars a month electric bills five hundred dollars a month my car insurance is three hundred dollars a month you know you still got a lot of money left over yeah exactly i still can't figure out where all your money is going it's not too baton class right is your husband as stressed about this as you are oh god no no he lives his best life well that could be part of the problem what does his best life spend money on uh. i i don't know he takes he takes a hundred dollars plus or minus uh. usually it's plus a week out for his gas and whatever else he thinks he needs uh. and that's that's and then if he needs more he'll ask if he can take more and most of the time the answer is no because i don't have it so he's getting an allowance from you yeah all right so okay there's a couple things that i do here that we can work on but i still don't know the answer sometimes people call and i go oh it's your stupid car sell your stupid car but it's not your stupid car uh. you about got this car paid off in a few months uh. it's your stupid credit cards but they are the that's where it's leaking they're the symptom they're not the problem okay if we quit paying them and you're still spending more than you make you're still going to have a mess right so that's the issue so i hear two things i want you to work on and i don't know if this is going to solve it all but it's going to get you on a path to help you solve it because you'll discover what i've been looking for with these questions and what george has been looking for with these questions so we're going to send you the uh. uh. a uh. one-year subscription to every dollar to tie into your bank and there's two things i want you to do for thirty five forty years i've been doing this a hundred percent of time i put someone on a detailed written budget where they spend every dollar on paper in this case in the app before the month begins when you allocate every dollar has a name of the sixty four hundred that's what i starting to do in our discussion you're gonna feel like you got a race i hear that every single time because chaos always eats money disorganization always eats money because it's it takes you into drama mode which is impulse mode with money and that's where you're living here i can hear the stress in your voice i'm i'm feel bad for you and the frustration in your voice because you can't get control of it so for the first time in your life you're a going to tell your money what to do instead of wondering where it went and once you've come up with a plan you don't deviate from the plan it's your plan so you get to tell it what it is it's gonna be food shelter clothing transportation utilities and then we get the credit cards and you're gonna cut up all your credit cards is number two okay and number three he needs an actual job yeah why is a grown man making ten dollars an hour well he he uh. i honestly i can't tell you out exactly how much he makes he makes so he brings in four hundred twenty dollars ten dollars an hour because they take a hundred and fifty four dollars a week out of his no he needs like a real job this isn't about deductions he needs to go make another twenty thirty forty thousand dollars a year with a career now you have some margin to claim with his debt in under two years and the two of you gotta start working together carrying this you need to ask him to help you carry the emotional load of this tired of you being his mommy you easy you you you you you you you you you you you you you let me tell you what i get asked all the time when should i get term life insurance how much do i need is it affordable those are the right questions to be asking so let's take a quick review the fact is term life isn't a baby step so if anyone is dependent on your income you need to have ten to twelve times your income in life insurance now and most people are surprised by how affordable term life really is even if you're not in perfect health look i understand the hesitation since most insurance companies make it more of a hassle than it needs to be not at zander insurance they're not an insurance company their broker that works for you that means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family for almost thirty years i've recommended zander for straight answers competitive rates and coverage that actually protects your family call eight 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That's zander.com. Jeremiah's in Detroit. Hi, Jeremiah. How are you? I'm great. Thank you. How are you doing? Better than I deserve. What's up? Hey, I'm a big fan of the show and I've got a decision to make. We've got a mortgage that we've been hyper-focused on paying off, but a $420,000 mortgage at 5%. And I've got money that I could pay it off tomorrow. And with the market correction coming, I'm wondering what is the best financial decision based on opportunity lost, right? Opportunity risk versus the mental well-being of getting rid of it. When's the correction happening? I want to mark my calendar, make sure I'm prepared. Do you know the date? No, sir. Hence the call. Do what? Hence the call. I said, hence the call. Why do you think there's a correction coming? I guess just listening to the different financial information coming out. I believe that the market's oversold again, if I was professional, I'm sure. Who's they? You just hear different, you know, Warren Buffett's of the world and other, you know, Warren Buffett is not selling due to a correction that's coming. That's not true. Okay. No, I mean, really, I don't know where you've gotten this. I don't know that a correction is coming and that's why I'm disagreeing. Let's pretend though, for a second, that a correction is not coming and that the market, uh, since 2023, if you left your money in, it would have doubled during that time. Even if that is the situation in the next five years, I'm still going to pay off my house. You want to know why? I would like to know. Yeah. It's a good question. You shouldn't, you should want to know. Don't take some guy on the radio's word for something. You ought to understand it yourself. That's good. I like that. Good, good man. All right. Now here's why the data tells us that people who have paid off homes build more. Wealth than people who don't actual data. Not somebody said on the internet, we studied 10,167 millionaires, 89% of which that's nine out of 10 of them who started with nothing and became millionaires in the greatest society for building wealth that has ever been known in the history of man called the United States of America. And that's what they have done. And it took them an average of 12 to 17 years to build that first million dollar net worth. As we interviewed them, they had a one to a $10 million net worth on average. They all said 86% of them said paying off their home was a key part of them becoming wealthy because of the piece it gave them because of the effect on their relationships, because of the effect on their career choices, because they weren't worried about some Bozo taking their home. And I guess what? They also freed up a huge amount of money. Yeah. A huge chunk of money each month to invest because your most powerful wealth building tool is your income. So even if you and I are diametrically opposed on whether a correction is coming or not, doesn't matter. The answer here is still going to be the same because the data tells us your most powerful wealth building tool is the guy in your mirror. None of them precisely zero said the way I became wealthy was. I arbitraged my personal home by borrowing at 5% and investing at 7 to 12 to 14% or whatever the market did right then. None of them said that's how they become wealthy. Zero. And this is wealthy people, not broke people in their mother's basement with a financial blog. These are real wealthy people, people that really did it. And so that data tells me that that's the way to go. When God said in the Bible, in Proverbs 22:7, that the borrower is slave to the lender, it didn't say accept home mortgages. It said period, slave. Can you imagine the attitude at work of someone who's not a slave versus someone who is a slave? Can you imagine your likelihood to get promoted? Can you imagine the divorce statistics among slaves versus non-slaves? Guess what? Divorce is a key factor in building wealth because marriage is grand, but divorce is 50 grand. So all of this comes into play. And it's a little more complicated than a simplistic arbitrage formula of I've got a 5% mortgage and I can invest in the market at 12. That's very naive and incomplete. That's not how life really works. And so, really good question, Jeremiah. Thank you for letting me get up on my soapbox. Because I know right where it is. I enjoyed that. That was fun for me personally. But a couple of good thoughts here. Number one, time in the market beats timing the market. And so you do want to be in there a long time. We invest for the long haul. So the question I have for you is, why were you investing? Was it for the purpose of paying off that home once you had the full balance? Was it just for fun? And then why do you want to pay off the home? It likely has nothing to do with if the market's going to be up or down. It's probably because you want some peace in your life. Yeah, he said that. He did say that. There is a correction. To his credit, he did say that. So George, let me ask you something. Because I've made such a good habit. I'm so proud of myself. I just don't read the trash on the internet. I hardly watch TV anymore. I'm becoming that guy. Wow. You know? It's like going outside and stuff. And so I certainly don't read the asinine comments that some of you trolls post after our stuff. Sometimes my friends tell me about it. Sometimes George tells me about it. I fill them in, don't worry. But I don't read them. Because I don't really care what you think. Because you're wrong. So I don't need to read your tripe. So I'm curious, because since I don't inject myself into this world, where is Jeremiah going to get such piss poor information? Well, you know, on, I think, especially on Twitter, there's a lot of news that flies by and there's a lot of here's what's going to happen. There's an AI bubble and it can't stay at record highs for this long. Something's got to give. And so I think people are feeling the pressure of things are too good. It can't be good for much longer. So it's basically the spirit of Eeyore has gotten loose on the internet. Essentially, it's everything's overpriced and the AI bubble. It's bad. Everything's bad. And NVIDIA is overpriced. Little man can't get ahead. It's gotten too big, so it has to fall. The spirit of Eeyore. When you blow up a balloon too much, eventually it could pop. I think that's the idea. Or you could let it be free and let it drift away to wherever it is those balloons go to when little children lose them at the happy birthday party, right? And there goes the balloon, right? And eventually it pops in the solar system. How do we know? How do you know that, George? That's a good question. Were you there when it happened? I wasn't. All right. I don't know. It could just fly away to the place the balloons go to. Seriously, here's the thing. I don't know about market corrections in the short term. I truly don't. And I'll guarantee you this. Neither does anyone else. The only people that can be wrong most of the time and keep their jobs are economists and weather forecasters. They're the only ones. My wife is like, it's going to rain today. It's a 62% chance of rain. Watch it for three more hours. It will change. Oh, and by the way, that's a 38% chance it's not going to rain. Such an optimist, this guy. I'm going to play golf. That's it. I mean, I'm going. So you can sit here and look at the radar. I'm not going to. But this is the way. There's a human nature thing here that's interesting. So anyway, to help you with that, because we all have the spirit of Eeyore, some of us in larger portions than others, but we all have that person who wonders about the balloon popping. We all wonder about is the real estate prices. When are they going to come back down? I don't know. I started buying real estate. I started selling real estate in 1978. I haven't seen them come down just for a minute in 2008. And then they went right back up. Does anybody remember that? Anybody remember what happened when all you people came out of your houses after COVID? Y'all were buying real estate like a Baptist after a casserole. I mean, y'all went nuts. It just goes crazy, y'all. And so what happens to real estate? What happens to the stock market? I don't know. Let's look since 1970. Let's look since 1950. What's the stock market done? I started investing in my 20s in the 1980s. What's the stock market done since the 1980s? Made me rich. That's what it did. Did it go back down? Yeah. Did it go back up? Yeah. Did it go back down? Yeah. But overall, did it go up? Yeah. So I don't wring my hands and fret about, and I don't read idiots who talk about them. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. if you've ever been really sick or been the caregiver to somebody who was you know how broken the health care system can be man nothing is easy finding the right doctor sitting on hold for hours or gosh trying to understand co-pays and treatment plans and weird medical terms that no one really explains and so much paperwork but what if you had someone to do all of that for you someone to take the burden off your shoulders solace health pairs patients with a personal advocate whose entire job is to fight for you and these advocates are covered by insurance nationwide they handle the paperwork fight denied claims and make sure you're not getting lost in the system solace advocates are experts who average 16 years of health care experience and they serve people who are going through a health care challenge now if that's you or a loved one please reach out to solace so everyone can focus on what really matters getting better so remember the next time you or a loved one have a health issue you need solace in your corner they'll fight the system so you don't have to go to solacehealth.com slash ramsey or click the link in the description checking your eligibility only takes about two minutes that's s-o-l-a-c-e health.com slash ramsey you must be 18 or older and remember advocates do not provide medical or legal advice john's in charlotte north carolina hey john how are you doing great dave hope you are too i am how can we help thanks for having me on the show sure um so i am a dentist i graduated about a year and a half ago um i have two hundred and twenty-two years of experience and i'm a $250,000 student loans i'm getting married to my fiancee in four months and she is a lawyer um we can both expect to make about two hundred thousand this year and how much student loan she has no student loan debt actually how did she pull that off uh just fortunate i guess she had a big scholarship wow to be a lawyer okay cool yeah all right and so you got 250,000 debt due to the two of you have when you're married so we just bought a house so we got a mortgage of 252 so total 500,000 in loans okay and you're not married yet okay not married yet okay so the mortgage is technically in her name actually okay all right good currently but my name will be put on it i think i got the picture how can we help i've kind of i've kind of prided myself you know the last year and a half uh living frugally i feel like i'm living the same way i did in dental school um driving the same truck i have since high school uh now i got a little bit of money how much debt you got money did you not you didn't put on the student loan i mean i have you know you know what i mean an emergency fund and i've had some investments and stuff okay how much do you have in investments in an emergency fund i got about 40,000 investments 25 in emergency fund gotcha okay i'm caught up all right good i'm sorry i hate to keep interrupting you i'm just trying to get to make sure i know what's going on okay yeah yeah yeah you're good i'm an avid duck hunter and for years i've dreamed of kind of getting john boat to go duck hunting with and i found a real good one for five thousand dollars and i feel guilty about it um so i wanted to get your take on that okay well the the well i think we kind of pan back um from the whole situation and say all right what would we do in your overall situation and i think that's a good point i think that's a good point i think that's a good point i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and i'm going to go ahead and of course our goal for the two of you is to uh once you're married to combine your finances and have an emergency fund of one thousand dollars and everything above that goes towards your student loans and you pay off those student loans like your hair was on fire with no investing no investing no 401ks no nothing and with your great income the combined income in particular and i think you attack that with a vengeance and you work all the time until you make enough to get this paid off both of you you work like maniacs you've got obviously great professional careers but what tends to happen and we've worked with uh doctors and dentists uh for years doctors are worse than lawyers but not much worse and uh both of you get what's called docitis and docitis sounds like this you've gone to school longer than all of your friends you've paid a price to get dds after your name or jd in her case right um and and so we're you know we've paid a price to get these graduate level professional careers and we've held our breath and we've delayed pleasure while all of our peers are out hunting ducks right yeah correct and what ends up happening is it's kind of like holding your breath and it it's all it's it happens so much it's almost stereotypical that's why we call it doc itis you get out of school where right where you are and the first thing you do is you exhale and go buy a 250 000 house you exhale and go buy a bmw you exhale instead of turning around and addressing the student loan debt and that's that's very typical among people and that's and it's because i'm asking you guys to after you've held your breath for 16 years 18 years you've been in school i'm asking you to hold it for two more years and clear the student loan debt so that you've got the rest of your life with a 300 400 500 000 household income and zero debt but i'm asking you to do something that's very very hard to do emotionally and that plays right into this conversation and so what we teach is this extreme thing because it works of have continue to have no life you said you're acting like you're still in dental school that's good but you're really not because you're making really good money and you've only saved 40 grand so that's okay it's better than most but you're really not like living on a beanbag chair i mean you're really not down to nothing you've just been careful and intentional so um the five thousand dollar bass boat or i'm sorry duck boat is not going to cause you a to get more ducks you're already getting ducks with your buddy's boat uh and b it's it's not going to cause you to go bankrupt if you go do it but what i'm most concerned about is that you address the overall philosophy of this idea that somehow i've got the cat by the tail you don't you're a broke dentist you're a quarter of a million dollars in debt and bless your debt for marrying you yeah you know and i want you to i want you to get your head around that and then decide is this grown man gonna go buy a five thousand dollar boat to hunt ducks there's nothing wrong with it i don't blame you it's kind of fun i like hunting them too but uh i'm a wing man i love shooting birds but um going pheasant hunting in a few weeks but i'm not buying a boat to do it and i've got the money i'm just gonna fly up and use somebody else's stuff so you can do that a lot in your area so i wouldn't buy it because of what it represents in you i want you to reprioritize things and who you are as a man coming into this marriage and you're putting her first you're putting your future first and you're addressing the little boy that lives inside of all of us that wants cereal on the cereal aisle and you're going to tell him no and that's called being a man because i have bigger goals and then i'll buy a duck boat and buy a piece of ground with ducks on it later in cash you buy a real nice and then buy some ducks i mean whatever you need to do i mean you'll be able to do any of it you want to do at that point right so but i wouldn't do it for that reason not because the five thousand dollars is a deal breaker what do you think well it's not an affordability question this just happened last night dave my daughter wanted a popsicle before dinner and in my head i'm going if she eats that popsicle she's not going to touch what's on the vegetables look at you bring the metaphor and so then i'm this is kind of how we all are that toddler still lives in all of us and i'm going if you get that duck boat you're going to get pretty comfortable those weekends are not going to be spent working overtime you're going to be going i gotta use that boat i gotta get it on my boat and so i like it for the dangling dangling the carrot is good for humanity it makes us want to go hit the goal do it faster than we normally would have so we can get to the dessert so we can get to that key lime pie at the end but it's not about a duck boat is wrong and it's not about a five thousand dollar duck boat and your situation is wrong it's about what it represents in your philosophy of life and how you're going to address the next five years because dude if you if the two of you take care of the next five years and you're making three or four hundred grand and you got zero debt and you pay off your student loan you pay off your house you understand how fast you're gonna have 10 or 15 million dollars i mean the numbers are astronomical in your favor unless you screw it up one duck boat at a time if you just took the student loan payments that you free up and invest that you'd be multi-millionaires just that alone just that alone as soon as you do that sooner you do that, the sooner you're multimeter. So we teach people, John, to live like no one else so that later you can live and give like no one else. In the scriptures, it says no discipline seems pleasant at the time, but it yields a harvest of righteousness. And I mean, some people, a very small percentage of the public likes to go to the gym. The rest of us do it because of what it gets us, not because we like going to the gym. And we had a whole bunch of us run the half marathon around here. And Kelly, our producer at the time, she said, I'm not going to run anywhere. I'm like, why? She said, the Bible says only the wicked flee when no one is chasing. That's in Proverbs. You can't argue with that. That's biblically based. Why are you running? Who are you running from? What did you do? But to Kelly's credit, yeah, not this Kelly, not a different one. She's lost a bunch, a weight. She's now John Deloney's producer. That's why she's so healthy. She's in great shape. I'm so proud of her. She'd done a great job, but it wasn't by running while no one was chasing. If you're waiting for rates to drop before you buy a home, here's what nobody tells you. When rates fall, every buyer who's been sitting on the sidelines makes their move at the same time you do. That means more competition, higher prices, bidding wars, all that. That's why I tell people to talk to Churchill Mortgage before they do anything else. Churchill gives you a strategy so you're not at the mercy of the market. They can show you what you can afford, not just what the market will approve. And with their certified home buyer program, your financing is completely secured before you shop, which means when rates drop and everyone rushes in, you're already ahead of the crowd. You're not scrambling for pre-approval while the house goes to someone else. My husband and I bought both of our homes with Churchill and having a real strategy, not just a rate we were waiting for, made us ready when it really mattered. So start your search with Churchill. Click the link in the description or go to churchillmortgage.com/mortgage. slash Ramsey offer for an exclusive Ramsey audience offer. ChurchillMortgage.com slash Ramsey offer. Speaking of boats. We're about to be on a big one. We're going to go on a big one. No ducks involved. We're talking about a major, super nice cruise. The Ramsey cruise. The live like no one else cruise. And you only go after you're out of debt and you have your emergency fund in place. You're on baby step four or beyond. But if you're on baby step four, you're out of debt except your house and beyond. You're working on your investing. You're working on paying off your home and maybe your baby step seven, maybe you paid off everything. Then come celebrate with us on the live like no one else cruise. All the Ramsey personalities, me and Rachel, John, George and Jade will be there. Plus many others going to have a lot of musical guests like Natalie Grant will be with us. Absolutely amazing lady. Many, many other people will be with us. We're going to be teaching and recording the podcasts and all kinds of different things on the ship. And so you'll have events you can come to with me teaching, setting goals after you're out of debt and building wealth. And so you'll grand cayman half moon cave which is their island and all that stuff so check it all out baby step four and beyond we're going to be going march 14 through 21 george we had a blast it was so much fun last time just seeing the photos kind of took me back i got excited again yeah ready to go guys there's not that many cabins left and only a 600 deposit to get your cabin done uh so you can do that by clicking the link in the show notes or going to ramsey solutions.com slash events you better get in on this because march is going to be here in about 30 seconds and you're going to wish you did sabrina's in houston hi sabrina how are you i'm doing well how are you better than we deserve what's up i was wondering if uh we should include a car that we co-signed for with our daughter as a part of our baby step two yes okay the reason is is that you're going to pay it okay that's why they wanted to co-sign her because they don't think she's going to pay it yeah that's kind of been on my mind for a little while and how much does how much is owed on the car 12 000 okay and what's your total debt other than this and other than your mortgage 2000 will be paid off in at the end of october until i said this yeah okay yeah correct correct okay including this it'll be next june i think yeah what's your household income about 200 why does it take till june to do two why are you only doing two thousand dollars a month if you make that kind of money so we have our mortgage which is 2000 and then we have like electricity we pay like our insurance is like a thousand um yeah we have 200k right it's uh you have money going into your 401k still yes and unfortunately for my job i can't opt out of it like it's automatic how much is automatic eight percent were you a teacher um no i work for a local municipality yeah yeah okay all right um but you've opted out of social security probably hadn't you yes yeah good all right uh which also should increase your take-home pay by 765 so it ought to be close i think if you guys sat down and really did a detailed budget you would find there's more margin than you think okay probably four grand in here to throw out the debt how are when you pay off this car early let's say you wrote a check next month and paid it off just for the fun of it what does that do relationally with her what's the plan then would you ask her to pay you back for it or what probably not yeah um her situation is i mean she's doing well she can maintain a job really well um it's just she's still young and doesn't have a career um so how old is she she's 23 is she married um no she go to school uh yes okay yeah okay i like that then yeah i just pay it off and it's a gift to her and we shouldn't have none of us should have borrowed money on it we shouldn't have co-signed you we shouldn't have taught you to borrow money on it you should have bought a car you could pay cash for because you're a broke 23 year old but the good news is we're going to write that wrong by paying this off for you and you're free uh the one thing we would ask you to do honey is to consider the fact that um that you just got to get out of jail free card so don't jump back in jail don't go into debt we're learning to get out of debt we want you to learn what we wish we had learned when we were your age so i'm going to give her that speech right right that goes with me paying off your car early and you don't have a car payment anymore so that's not an excuse to go to more happy hours that's an excuse to work on your career finish your degree and get out there and kill something girl you can do it i mean i'm that's the speech i'm giving her so i like where you are i think you're doing great i'm with george i think you can tighten up your budget a little bit yeah i mean making probably 10 plus take home i think we can find four in there and make do with the six to cover all the bills okay so the numbers george we're seeing are disturbing uh on the amount of help that parents are giving their 20 somethings and their 30 somethings they're paying for their grandkids private schools they're paying for car payments they're paying for the amount of financial codependency among parents and grown children is like crazy it's like it used to be that that was like something you made fun of but now it's everybody used to be the exception and now i forget the numbers but the thing i read the other day blew my mind is like 49 percent of the single males under 30 live at home still wow uh i do know an eagle that doesn't leave the nest eventually is known as a turkey yeah there's more single women buying homes than single men yes and so that shows you something yeah and they're not saving their money they're playing draft kings they're sports betting and they're not saving their money they're putting it in stupid butt stuff like crypto. This is what the data is telling us, and it's a really scary trend. So I think, George, it's a good idea for us to pause a second, not to pick on Sabrina, but she does give us a jumping-off place, and say it's a good idea, moms and dads, to let your little eaglets fly and be free. Co-signing is a bad idea. And you want to make sure you're helping temporarily to help them launch, not enable and give them a hammock. And that's unfortunately what's happening, is they've created an expectation that I'm basically going to finance your lifestyle, and we love having you home, and I'm happy to fold the laundry. And what happens is you end up stunting your growth in your career, in your relationships. Every area of your life eventually will suffer because of that. You sort of resort back to your 14-year-old self. I was defiant and a bit of a jerk, and so I kind of deserved it. And my dad is like, okay, genius, go figure it out. So you got booted. It's like, good luck with that. And, you know, there wasn't a. But we'll take care of you because you don't have a career yet. It was like, you're a freaking genius, go act like it. See if those wings work, Dave. You just got pushed out of the nest. Flap, flap, flap, buddy. So, yeah, that was a different. I guess the hillbilly culture is just a little different. Yeah, it used to be something had happened if you were still living at home, or you came back home, there was a life event. Yeah, there was something bad happened to you, and you needed a place to heal, and that's understandable. That's a safety net, not a hammock. But, yeah, moms and dads, cosigning. By the way, cosigning period is stupid. It's in the Bible. Proverbs 17, 18. One lacking in sense cosigns for another. I have cosigned, Sabrina, so I'm not picking on you. I had one poor gentleman cosign for me, right? Before I went bankrupt. And he ended up having to pay the debt when I went into bankruptcy. And it took me a while to get it paid back. And we were never quite the same after that, me and him. I can imagine. He was nice to me. He was not. You know, he signed up for the trip, but he got to take the trip. I signed up for a couple of cosigns. I got to take the trip. These things go bad. That's why they want to cosign her. This episode is brought to you by BetterHelp. Every year, you tell yourself you're going to handle the holidays differently. You're going to stay calmer. You're going to feel more peace. And then it's the same old pattern. The same family tension. And you're cranky, and you're tired, and you find yourself snapping at people that you love. Listen, you still have time to get ahead of everything, and understand what's behind your reactions. Therapy can help you build a healthier plan before you actually need it. When you're ready to have that conversation, I recommend BetterHelp. BetterHelp is an online therapy platform with more than 30,000 licensed therapists across its network. If your first therapist isn't the right fit, you can switch at any time for no extra cost. And get this. If you've thought about trying therapy with BetterHelp, insurance options may now be available nationwide through participating providers. And eligible members have an average co-pay of just $23 a session. Listen, you know what's coming this holiday season. This year, you have time to make a plan before the holiday chaos by preparing differently. Go to BetterHelp.com slash Ramsey to check out your payment options. That's BetterHelp, H-E-L-P, dot com slash Ramsey. Or click the link in the description. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. George Camel is my co-host. Stephen is in Wichita, Kansas. Hey, Stephen, what's up? Hey, Dave. A pleasure to visit with you. I've been a long-time listener, and I have to say as a pastor, I know Proverbs 22-7 well. The rich rules over the poor, and the borrower is a servant to the lender. But here's where my struggle comes in. I didn't borrow my way into the situation. I got sick, I survived cancer twice, a bone marrow transplant, exhausted nearly $300,000 in retirement savings, and now I'm fighting kidney failure just to stay alive. So my question is, how do we apply biblical financial wisdom when somebody hasn't been irresponsible but has simply been overwhelmed by the circumstances beyond their control? Or how do I remain a good steward of what God has given me when the cost of living is the cost of surviving has taken nearly everything that we have? Where was your health insurance? Well, I was on Medicare, and I am still on Medicare. And even with Medicare, you know, they bill me $150,000 a month, and Medicare pays their percentage. I'm paying $2,300 a month, even with Medicare, even with a Medicare Advantage plan. Okay. How old are you? I'm 48. Why are you on Medicare at 48? Because, okay, so I had cancer, I beat it, and I had it again. I beat it, and the chemo messed up my kidneys, so I'm in total renal failure. I'm actually looking for a very rare kidney right now. Like, my CPRA is 99.9999% worse than what Robin Roberts had. So we're really looking for a kidney. If you were 48 and you had cancer, you should have had health insurance. Not Medicare. Well, no. Okay. So, I did have health insurance for the cancer stuff, but still, even with the cancer and the insurance, I mean, I had to pay. I paid. I paid my deductibles, and it ate it up, and then. Yeah, your deductible should be like $4,000 or $5,000. Technically, $4,000 or $5,000, but when you add. No, not technically. That is the deductible. It just is the amount. So, I'm trying to understand. Do you have other people? Yeah. Do you have other people in the house, though? That, you know, are covered under the insurance as well, and they have a family deductible? And I think our family deductible was like $30,000 for, you know, the one year when I had. That's different than $300,000. Exactly. But this has been going on since 2013. So all the different things that have happened that led to this particular kidney failure, I mean, it has exhausted us. Yeah, you're. Exhausted us financially. Yeah. Okay. Yeah. And you're just exhausted, too. I mean, my gosh. What a horrible series of events you guys have been through. I'm so sorry. I wasn't questioning any of that. I was just trying to understand how we got here. Because typically, if someone, 48, goes through a whole series of, you know, rough spots, that's not. That's the understatement of the day. But it goes through a series of tragedies, let's just call it. You know, you've got a deductible. You've got an 80/20 copay up until a certain point in time. You've got a 50/50. You've got a 50/50. You've got a 50/50. You've got a 50/50. And all of that guys, it's Steven brings up a real. valid point that is the number one cause of bankruptcy in North America today is not credit card debt. It's medical bills. And so, but under our current environment, I mean, you can get in touch with health trust financial and get health insurance in place. So health insurance is, and getting health insurance in place and keeping it in place is a necessity because you don't, you're one major medical event away from losing everything you've built over the last 10 years. And so, I mean, one stay in a coma situation and you're down for a car wreck or whatever, and you're, you're down for 30 days and ICU, um, that's a million dollars and you're broke if you don't have health insurance. And so you've got to make sure health insurance is in place. And when it is in place, then you've got three numbers. You need to know how much is your deductible. And in his case, he brought up a family deductible. In addition to the individual deductible, what is your copay? And most importantly, in these major events, what's the stop loss or the out-of-pocket maximum with your policy? And most of them are under $20,000, but know those numbers. Don't just blindly sign up at HR for your health insurance and have no idea what you're getting into. And along with that, make sure you've got long-term disability and term life insurance. Yep. Because you don't know what life is going to throw at you. Well, Stephen, we'll be praying for you, man. I'm sorry. Sorry you're facing all this. If you're a business owner, time is money and nothing drains both faster than a hiring process that doesn't work. You need qualified candidates who actually want your job, but sorting through applications can cost you dozens of hours you don't have. And that's where ZipRecruiter comes in. ZipRecruiter automatically puts the most qualified, most interested candidates at the top of your list. Their new feature lets candidates tell you in their own words why they want your role. So instead of guessing who's genuinely excited, you know, you get to skip the sorting and go straight to the people worth talking to. At Ramsey Solutions, we can get behind that. We only hire people who believe in our mission because a paycheck gets someone in the door, but belief is what keeps them there. ZipRecruiter helps you find those people faster, and that's why I recommend it. And listen to this. Four out of five employers who post on ZipRecruiter get a quality candidate within the first day. So try ZipRecruiter for free at ZipRecruiter.com slash Ramsey. That's ZipRecruiter.com slash Ramsey. Meet your match on ZipRecruiter. If you're working the baby steps, the best and fastest way to do it, is by using EveryDollar, our app. It's more than just a budgeting app. It's the plan, the Ramsey plan, built right in. You can track your progress, get personalized recommendations, coaching for your situation. It's like having one of us in an app. Yeah, it works really good. It's like having us walk with you every day, encouraging you, saying this is the next right thing. Start EveryDollar for free by downloading it in the App Store or Google Play. Brandon is in Pittsburgh. Hi, Brandon. How are you? I'm better than I deserve. How are you, Dave? What's up? Hey, so my father's in a rather bad spot financially. He's living off Social Security. And I'm, you know, on my way to be a baby steps millionaire. And I'd like to give, I'd like to give to him again. He's asked me for money three times now. The first time I gave him $1,500. This time he said, I'm going to give you $1,500. I'm going to give you $1,500. And he's like, well, anything you can shoot my way, I'd be greatly appreciated. And I talked to my wife about it. And she's, you know, she's definitely not on board. Why? Because, well, she's never, she's never really had, you know, a decent amount of money. And she's always scared of losing it. And she doesn't even like the fact that we have it in the stock market right now. So it's kind of a kind of a slippery slope. I don't, I don't know where to go with it, Dave. Okay. Well, um, start with your primary responsibility is to be aligned with your spouse. And so, um, in a situation like this, Sharon and I would be having, we, but we would continue to be talking about it. Say, hon, this means a lot to me. I want to help dad. We have the money to help dad. And if so, how much money do you guys have? What is your net worth? About 640. And what's your household income to a later year? Okay. So a thousand dollars going to dad is not going to cause your wife to be homeless, right? But that's the emotions it's activating. And so you need, that means that you've got some work to do. The two of you have some work to do to get on the same page of actually how much money we have and what does it, that really mean. Okay. So let me give you an example. Many, many years ago, I was teaching financial peace university and a guy came in and he said, I have a paid for home and a $3 million net worth. And my wife works 80 hours a week as a real estate agent because she's afraid we're going to go broke and I can't get her off of it. And I said, okay. So we sat down the three of us after the class was over and I showed her, look, if you guys take a hundred thousand dollars a month and burn it in the middle of the floor, you're not going to go broke. So you need to quit working so much. You're not broke. You're not going to go broke. You're fine. It's over. I want you to work only because you want to work. And you know what? It took her about a year to get her emotions regulated to the actual reality of their numbers. And she finally slowed down. And they went on a cruise and she was working, you know, still selling houses, still working 30, 40 hours a week. And, uh, but she couldn't get there because her emotions had her in a different place than the mathematical reality. I'm more concerned about that for you guys than I am your dad. Your dad will figure it out. And I don't want to drive a wedge between your wife and you with your dad because he hadn't saved any money his whole life. Right. And I'll tell you the other thing she's concerned about. And she hadn't said it. See if you think I'm wrong because it's hit or miss with your dad. She thinks there's no end to it. It's for like every, every three or four months, it's going to be 1500. Yeah. Yeah. That's 100% fair. Yeah. And that she's, she's worried about that. And that's a fair thing to be worried about. It's a pattern here. That's going to get worse, not better until you deal with your dad in a different way. But I'm not going to do that. I'm going to do it I'm going to start with getting her on board with where we are in general, because even if it wasn't your dad, if it was somebody else and God said, Hey, I want you to go give a thousand dollars to this person and help them. You can afford to do that. It doesn't even show up on the radar in your world. You make two away. You have six 40. You're okay. I didn't ask you to give a hundred thousand. I said a thousand, you know? So I want you guys to get your emotional head around that. We see this a lot. Yeah. Would she feel the same way if this was going to your local church or a non-profit or is this specifically tied to you're giving money to this guy and I'm scared we don't have enough? No, I would say anybody. Okay. So we can separate that from dad's situation. So there's one thing over here. We have the scarcity mindset. We need to break her out of now on the other side, we need to figure out what is the appropriate amount to give to dad while we're not enabling. And it doesn't spiral into oblivion where we just fund his lifestyle and the number keeps going up every year. How old is your dad? 74. How's his health? On the low, it's not great. Not great at all. He's got heart issues. Yeah. Does he rent his own place? Yeah. Him and my mom, they're like roommates. Okay. What are the total income they have coming in every month? I don't know those numbers, but I would assume it's under 2000. I'd like to know if I'm going to be funding them. I want to know how much it costs to cover their bills, but I don't want to give them so much that they're just blowing it. Yeah. Why does your mother have money coming in that's not in this equation and she's letting the old man starve? Yeah. Well, I know they combine a little bit because my dad doesn't work right now, which is, I told him, can you get a job at AutoZone somewhere? You know what I mean? He says he's applied, but he hasn't gotten, you know, he hasn't gotten, you know, he hasn't gotten a job. Yeah. A job landed. So my mom works at a diner. I know she does okay, but you know, So it's not $2,000 a month unless she's not working much. Okay. But they're struggling. That's fair. All right. So what we would do with anybody that we want to help, and we do this even with Ramsey Family Foundation when we're helping a single mom in a situation or something, we sit down with them and make sure that they're exactly what their budget is and that they're being wise with the money that they do have coming in and is there something they need to sell, is there something that's unrealistic in their expectations, and then once that's adjusted to some common sense reality, then we can tell how much we need to help with actual money. But a lot of times the coaching is 90% of the fix and 10% of its money with mom and dad. Now, back over on the overall call and the question you're asking me, if I'm in your shoes, 90% of your takeaway from talking to Georgia May should be working with your wife and the two of you get on a adjust her. Your emotions and your emotions to the reality of your numbers. And that's what we're looking at. And if you do that with a detailed budget and you make her, make it clear our household is the priority, but with the excess we're going to fund part of it with this line item for dad over here at 750 a month. And now she knows instead of being surprised when dad asked for money. You know, it's, but it, it, the math does give people hope. I mean, I've looked at this, it's a thousand different times of people over the years. You're, you're exactly right. George, where, where you lay out a certain amount, you go, okay, $2 million a year here in mutual funds. If it's invested in decent mutual funds, then they're going to make over 10%. Okay. This year, year to date, it'd be 12.2 right now. Year to date since January. Okay. So if you've got 200 or $2 million, it's producing 10%. That's $200,000 a year. Plus you make money over here at your job. So, you know, you've really gotta be out of control to screw this up. You gotta be acting like some kind of rockstar, you know, buying jets and tearing up hotel rooms or something to really screw this up. But if you'll just live like a normal person on your income and let your investments continue to grow, you've got a $200,000 a year margin for generosity and for some enjoyment of life. Once you've built that nest egg that way. And so that's the point of living like no one else. So that later, you can live and give like no one else, but what your wife is experiencing every single person experiences, including me. And that is our emotions do not keep up with the mathematical reality. As we build wealth, none of us feel as wealthy as we become. If we do these steps,. ,. Most people spend years changing their money habits, but never think twice about how their bank probably works against their values with nuisance fees and endless debt products. You're being weird by sticking to the baby steps. You deserve a bank that helps with that. That's why Ramsey partnered with fair winds credit union. They built the smart bundle specifically for Ramsey listeners, not for everybody else. And it includes up to 10 high yield savings accounts. So you can set up different funds for different needs and goals. And now they've introduced the live like no one else debit card. The original debt is now available. It is normal. Be weird. Debit card is still available too. And every time you reach into your wallet, your card is a daily reminder that you follow a different path. Listen, if you're living like no one else, your bank should back you up. Check out the fair winds, smart bundle, including the all new live like no one else. Debit [email protected] slash Ramsey. That's fairwinds.org slash Ramsey insured by the NCUA. Thank you for tuning in and we'll see you in the next video. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Our question of the day is brought to you by ask Ramsey our free a I money tool. That provides personalized answers based exclusively on Ramsey answers, Ramsey principles, visit Ramsey solutions.com/ask Ramsey. It's free. Today's question comes from Brett in Wyoming. I have debt and collections that I defaulted on and stopped paying on them. They still show up on my credit report. Should I include those in baby step two, along with our credit cards and car loans, or do I not need to worry about paying those off since I don't want to use credit cards? I want to use credit in the future and my credit score won't matter. Oh boy. Somewhere in between. I mean, sometimes, you know, if you can settle on them and just save up a lump sum real quick and get rid of them, do it, but do not just ignore them forever. They can come after you. They can sue you. It's not just going to go away, even though you'd quote unquote, don't care about credit. So you can include them in baby step two and knock them out. But my guess is they're older debts and you could probably settle on them. Yeah. What I would do, Brad is probably, a modification of that. Um, and that is work your normal baby step two on your active debt. The ones you're current on. So clear your credit cards, your car loans, all that using baby step two. Then when you're out of debt, everything but the house and the collections, then make a new debt snowball of the ones that are in collections and save up, you know, 50% of what the first one is and call them and offer them 25 or 30 cents on the dollar. If you, if you settle with them, get it in writing and do not give them electronic access to your checking account because a debt collectors sometimes are good people. And if their credit card debt collectors, they're not good people. They're scum. They will lie and they will clean out your account. Okay. We deal with them all the time. It is a scummy business. So don't, don't, don't mess around with them. You're playing with snakes here, but you do need to pay the debt just cause it's on your, just cause it's day wrote it off. Doesn't mean they're not going to pay you. I mean, they're not going to sell it and someone else is not going to knock on your door at the most inopportune time. So you do want to clean it up. You do want to pay your bills, even if you're settling them for 25 or 30 cents on the dollar. And so, but do it in writing, keep the paper hard copy and give, and do not give them electronic access to your checking account and do it as a separate, uh, defaulted debt snowball after your non defaulted debt snowball is completed. Ryan's in Columbus, Ohio. Hi Ryan, what's up? Hey, how are you doing better than I deserve? What's up? So the question I have, um, real quick, I'm 24 years old. I am running an auto repair business. Um, and I am moving from the stage of solopreneur to high to my first hire. Uh, the question I have with it is in the process of moving from, first stage to second stage, how do I do it from a position of strength with the numbers? I, I have kept a pretty close hold on everything, running everything myself. Um, and I think I've done reasonably well, um, been reasonably successful. Uh, and, uh, and how do I kind of move into supporting another, um, full-time technician, someone who can put the work through and, and not allow it to kind of, uh, rock my boat financially. Yeah. Great question. Great question. In business on, in small business, the most difficult hire you will ever make is your first hire because it's emotional and you don't know what you're doing and you know, you don't want you're doing and it scares the crap out of you. And I hear all of that in your question, which means you are very wise. You're very wise. Okay. So I still want you to do it, but it's learning. A new skill. Okay. So spend some time with the people interviewing them, set the compensation package up to where they are producing more than they cost. All employees at the end of the day have to promote, produce more than they cost as a group. If they don't, we go broke because it's the largest expense line item on your, on your profit and loss statement is your, your payroll. Once you start having payroll. And so I spoke with George and Jade a few months ago about moving into my, uh, it might've been a year ago about building a new building, the facility I'm in now. And my question was whether I was pretty new to you guys. My question was whether to borrow a business loan or not. George told me that would be the dumb dumbest thing I could do. Um, I followed his advice and was able to cash for the rest of the building. Um, now I'm in a position where I'm a little bit cash tight. Um, and I want to expand. and the services I can offer, more equipment and so forth. - How much cash do you have? um liquid cash maybe around 40 000 and what does a technician cost uh he's willing to start at 25 an hour um 40 hours a week plus a little bit so around 1200 a week okay so four thousand dollars a month so if he produced absolutely nothing it would burn up your cash in 10 months which is a zero possibility of that happening you're not gonna let him sit there and produce nothing for 10 months you'd fire his butt right i mean he's got like one month to get things moving so i assume you have a backlog of work that you started a few days for me hold on hold on i assume you have a backlog of work you can put on him right yes at this point yes that's not a problem um at at the moment uh and so far what i've seen in just a couple of days of you know kind of working with him some just you know we don't have a term agreement or anything but he's done a few things for me and he's good and fast and it scares me a little bit of how keeping him busy and keeping his peg you know moving up to keep him happy well let's just you know i i think you're just telling the truth when people start coming to work for us in the early days i'm like guys i'm gonna tell you the truth the truth is we all have to make money together or there won't be any money and that's the case with you guys you and me dude we got to make some money together so there's some money if we make a big old pile of money i'm gonna share it with you and you're gonna get your raises if we're starving to death over here your kids are gonna be skinny with mine so i mean just talk to him talk you know you're you're not corporate america you don't owe somebody you know you're you're not putting a brand on them or something like you own them you hired the guy we hope it works we think it's gonna work you got forty thousand dollars worth of the pad you're not gonna run through that that would be silly you've got to get the thing got the position has to work you have to you know fill it up with work the two of you and pretty soon you're probably going to put him on piecework anyway aren't you possibly um with the size of operation i'm running it can be a bit difficult to make you know make everything run as efficiently as possible because you have the chance of you know moving from one thing to the other but um we could get to that point depending you know kind of what how things work and then that's a no-brainer because he's earning he's earning his keep on every every turn of the wrench when you can get there so it yeah that's the way to run it if you can but you've got enough cash you're not tight on cash you got forty thousand dollars you don't have four thousand dollars you got forty you're all right you can do this but and you've already got your guy picked out you know but be clear with him don't over promise look i'm promising you a position here and we've got to get the work in the building and we got to get the work out of the building and when we do we're going to make enough money that you're going to have money and i'm going to have money and everybody's going to be happy but um it's a good problem to have if he's so fast that he's looking for more work yeah you might hire a guy just to get more work in the door now yeah that'd be your second hire exactly that that's the whole thing good good point i hang on i'm going to send you a copy of our latest bestseller called building a business you love it talks about the stages of business you're in the first stage which is called the treadmill operator where you're doing everything by yourself and you have to move to stage because doing everything by yourself gets tiresome after a while it's extremely efficient but it's exhausting uh you don't have to count on anybody but it's exhausting it's not sustainable long term so you've got to bring in other people in your growth curve to carry some of the weight um so that you get a situation that you're still in business 10 years from now you're doing the right thing ryan and you're scared for the right reasons and that's that that healthy fear will keep you wise and keep you asking questions like this good job it's almost annual enrollment time and you wish you could save money on health care costs but every year it's the same story premiums go up again and yet you can't even control your choice of doctors chm is not insurance it's a health cost sharing ministry where members literally share each other's medical bills instead of paying into a big uncaring system chm programs start at just 115 a month and while insurance premiums keep climbing chm isn't raising their prices this year and you're not locked into an enrollment window either so you can sign up right now before you watch your premiums jump again y'all ramsey has trusted chm for over 15 years because their mission is simple christians helping christians cover their medical bills visit ch ministries.org budget and use promo code ramsey for 50 credit towards your first month's membership ch ministries.org budget or click the link in the description so renee is in west palm beach hi renee how are you hi dave how are you thank you for taking my call sure how can we help i'm trying to get some your help on how to convert i have 1.2 million in a traditional ira i'd like to convert it all if possible to my roth um i'm 60 years old um i stopped working a year ago and i'm concerned about the conversions because i've read about the look back over two years for medicare at 65 so i didn't know if i should take the whole 1.2 and just divide it by three years and do those huge conversions but then i would also have huge tax bills you'll have huge tax bills but why are you not buying your own health insurance if you've got millions of dollars um i do have health insurance yeah i know it's 65 why would you not keep buying your own health insurance and have better coverage than freaking medicare uh that i don't know yeah i would not i'm 66 i'm not on medicare not a chance i'm not getting in the dmv of medicine okay so regardless because i got the money i don't have to and you got the money you don't have to so aside from the irma thing in other words uh on medicare i'm not worried about that but the the other thing the other questions are very real because i'm 1.2 million i mean taxes on that are going to be 300 000 bucks right on the if i converted the whole total amount yeah yeah okay now if we just did it if we just did it in one fell swoop you're just going to get hammered here well you really can't because you can't move enough to not to have bracket creep anyway you got so much money you did such a good job saving money so do you have other money well i have money in a um a taxable brokerage account that i would need to to use to pay the taxes there that's what i was after how much is in that um two million you're so awesome how did you do this a lot of hard work and discipline what was your career i started young um i owned a i built a medical coding and billing consulting business good for you well done well done so you already know what i was talking about medicare for i even brought it up okay cool i'm so proud of you you got three million bucks and i'll bet your house is paid for too yes it is and what's it worth uh i don't know um around 900 000 maybe so you got like four million dollars and you're 60 years old are you single the house needs work oh are you single yes why rich this is unbelievable i'm kidding with you you can just go buy yourself another house at this point i'm kidding with you well done okay now you're in you're in such a better place to answer this question what would i do if i woke up in your shoes okay the beauty of the roth once you get it all in there is from then on all of the growth is tax free right and you're not subject to rmds at 73 and a half you're not required to pull start pulling money out and when you name a beneficiary your beneficiary on the roth is going to pay zero income tax and zero estate taxes because your estate's not taxable at your at your level okay so that's another big reason that i want to do the conversion exactly so here's the thing if we don't convert it let's think that through if it's invested in good mutual funds and it's averaging 10 7 years from 0.3 to 1.4 it will be 2.4 if you don't touch it just let it grow now 2.4 is taxable if we don't pay this now but if we pay 300 000 today out of your brokerage now we've got 1.2 growing to 2.4 in seven years another million dollars and now it's all tax-free anytime you want to use some of it you can or if you never touch it it grows tax-free from now on but it and so my point is it's gonna keep growing whether you do this or not assuming you don't go to spending it and you're not going to okay no so it's gonna keep growing the only question is how much do we want the taxable money to grow i want no taxable money growing so i'm gonna rip the band-aid off today nip it in the bud mathematically i'm gonna spend 300 so i never spend another dime on taxes you so you would do it all this year just bite the bullet convert the whole thing but then um dave to come up with the 300 in taxes i'd have to sell some a lot yep in your bro some of your 600 no you got a million in the brokerage right two million two million brokers okay so you're gonna sell three you're gonna sell a little you probably got some gain on whatever you're selling yeah yeah so then it won't be that bad and you can choose the specific tax yeah you can choose what you want to sell out of that brokerage account like the highest basis one so you have the least amount of taxes yeah right so you can control some of that as well but i would be working with a do you have a financial advisor that you're working with right now on this um a little bit and then i have more my my cpa they probably you probably have some underperforming stuff in that brokerage account and you take the least the underperforming stuff which is called tax harvesting especially if you've lost money on some of it you're going to take those losses when you sell which would be amazing if you got some real weak spots that are losing money i don't know what what the composition of the brokerage account is but all of that to say and this is good what i'm teaching you is going to blow your cpa's mind they're going to they're going to melt down their face is going to melt off because they're going to want to try to run the bracket creep and the problem is you've got too much money to run a bracket creep and ever get that money out it's going to grow faster than you can roll it out yeah at bracket 15.8 percent yeah and it's going to grow faster than you can get the money out without breaching the the brackets on your taxes so you're gonna have to breach the tech you got to breach through it anyway okay to get there you're not gonna get there i didn't know if it was better to do a little bit each year or just do it all at once and everything you don't do is growing taxable yeah so their name's if you do a little by little each year a big portion of that money is going to be growing you're going to end up spending more than 300 grand in taxes in the in a long run okay yeah i made the number up 300 grand but it's pretty close not a problem it's what do they call that a park avenue problem exactly that's exactly you've been doing some good reading more well now that i've had more time this year of not working to research all the investments and i have them earning 15.8 percent and i have tried to look into the tax harvesting and i only have the only one thing i have a loss on is 11 000 okay well we're going to pull that and then we're going to pull our and then work your way up through the least performing portions of the portfolio of the brokerage account the most horrible ones which has also good news because you're getting rid of the underperformers we're cutting off the bad wood right while we're getting rid of the tax problem over on the other thing so i'm getting out of there i'm 66 and i started a roth years ago and paying it as fast as i could pay it every time i got anything in roth everything i got anything in traditional i moved it immediately i've got everything under the roth umbrella now and i hadn't even thought about the rmds or the stupid biden secure act and what it's going to do to my heirs uh where they screwed us again uh but welcome to the democrats uh so i think from i think from my rmds it's 75 not so many it may be i have i thought i had i thought i had even more time you do you do but you're still going to get hammered it doesn't because the thing's growing and growing and growing so it's hard to get your head around but it's pay me now or pay me a lot more later that's the way that comes down on the taxes on these situations i've looked at them 20 times and i've surprised myself i really hate paying taxes so bad i was going to try to get people to roll it out slow slow slow but when you look at with a million two she can't get enough out it's growing faster than she can move it yeah you can never get there you can see both differences by crunching the numbers with your cpa and financial advisor but i think you'll find it's probably just worth it to not lose sleep over it knock it out this year and get the dead wood out of your uh brokerage account that's just awesomeness you have done so good i'm so proud of you millionaire girl welcome back to the ramsey show in the fair winds credit union studio george camel ramsey personality is my co-host james is in raleigh north carolina hi james how are you hey james my name is james hello y'all firstly i want to say uh congratulations on all y'all's success and thank y'all for helping the tons of people around the world um my question for you is i have been following me and my wife have been following y'all's baby steps and um we've come across the hiccup i mentioned it to her a while ago so uh when she was a little bit younger um her mom is kind of not the best mother she opened up a credit card her first daughter to open up a credit card in her daughter's name uh she kind of crept that credit card it was i think it was like ten thousand dollars and she maxed it out uh basically left her with the debt well we're going through and i told her a while ago like hey you need to go to your mom and clear this up have her pay you well her mom doesn't really work and uh she's been stuck she's been stuck with the debt and she knows it was a dumb decision um we both do um i she has a right under eight thousand dollars left she's just been paying the minimum payment for quite some time now and uh our only debt left is um a truck payment and then now her or now that credit card and also i have a house payment but um okay that wait a minute i thought you said you weren't married um we i mean we we are like we so we weren't married but we ended up going to the courthouse because i was watching your thing um and so are you married we are now yes okay so it's your wife not girlfriend or fiance yes yes sorry we i was watching your episode the other day and y'all said something i'm like yeah we gotta to get on this i don't know what the holdup is because you got on somebody and so kind of straighten that out good for you okay so now you're married and uh it was just the other day congratulations thank you thank you and um so now it's not your girlfriend not your fiance it's and uh your wife was how old when your when her mother messed her over 22 or 20 no 21 or 22 so your your wife at 22 years old signed the paperwork and handed your her mother a credit card correct okay yeah yeah her mother's scum and no question about that but your wife was a legal adult and signed something legally and morally owns it so uh her mother's just a bad part of the story but otherwise we have eight thousand dollars in credit card debt and we have a car debt and and your household income is what uh household income uh on the low side 95 000 a year good for you and how much do you owe on the truck uh around 11 000 okay and eight thousand on a credit card what other debt have you guys got uh so just the house payment the truck and the credit card oh how much you owe on the house um around two hundred eighty thousand okay cool cool any other debt uh no sir okay so you guys bringing home six seven thousand a month right now what's that i am yes sir okay she not working uh correct we have a newborn uh well not newborn anymore he's three months old um but yes so we have him so she stays at home and because daycare around here or not daycare but well yeah it's around a thousand dollars a freaking week nowadays so she's gonna stay home so you'll be the the sole income provider making 95 minimum correct okay so out of that six or seven thousand after you pay the mortgage the bills how much can we allocate towards these debts on top of the minimum payments how much could you throw at you're gonna get an attack mode um i mean i can attack it i i mean i can i can definitely attack it how much i've been why i mean how much can you throw at it uh i mean definitely a few hundred dollars a month that sucks that's gonna take you a decade i'm thinking of thousands of month dollars a month yeah probably i guess i haven't really think about a thousand a month you're done in months yeah so let's reverse engineer and say hey man i'd love to be debt free in under a year what would that take so you're you're saying as in uh uh we should attack that and not have her confront her mother and say this is what we need to do you're not getting jack squat you're better off getting a second part-time job than trying to get money out of her she doesn't have any money she's a broke scumburger so unless you're going to try to sue her which you won't get anywhere with that yeah i would just take the loss and go man that sucks we broke a relationship and we owe this debt but let's just move on with our life and start just that your credit card is the smallest debt and we know who's not babysitting your kid yeah we already we made that decision yeah yeah for sure your kid end up with a credit card yeah yeah she's already asked for a social security number you're kidding no i would freeze that baby's credit before he was born she told us she told us that she doesn't want uh she said she don't want a copy of this social security she said she wants to hold on to it just so it's safe because she was uh she was somewhere else and i looked at my my girl and i told her i said did she think we're stupid yeah really your your homework is to freeze your credit and her credit and that baby's credit with all three bureaus yeah because this lady's gonna try to do some more damage this woman is bad news but she wanted to buy him his uh lifetime hunter's license yeah she's a freak test pilot for a broom factory man this woman's bad news yeah we gotta we gotta move on all right so yeah i i'm gonna put her over to the side where she belongs way over to the side and then the two of you are going to get on an every dollar budget and you're going to live on beans and rice rice and beans and we're going to attack the eight thousand dollars in debt and the eleven thousand dollars in debt right after that working the debt snowball that you've heard us talk about here on the air james you can do this i gotta tell you i think you're gonna do it because um there's a couple of things i observed in talking to you about you uh one is is that you're coachable and two is is that you are wide awake and paying attention most people are neither one and that's why most people fail they're not coachable and they're sleepwalking through this life and your eyes are wide open you're like i'm a new husband i'm a new dad i'm gonna protect everybody from this protect this kid from crazy mother-in-law uh we gotta get this debt gone this is grown-up adulting stuff man you are on fire i really like where you are this is a good situation so i'm going to send you a copy of my book breaking free from broke james that'll walk you through this whole process and get you fired up and uh get that credit card knocked out first and if you throw a thousand bucks fifteen hundred a month this thing then attack the car loan after that you're going to be done in a year but it's going to be a year and you're going to be done in a year and you're going to be done in a year of hustle yeah fifteen hundred bucks a month and you're out in a year and that's where you need to be uh and you can do that out of your income maybe picking up some overtime maybe selling a few odds and ends whatever you'll be in great shape very proud of you james i've found reverse engineering it is far more impactful for me instead of going well how much can you throw with the debt a couple hundred instead i go i'd love to be out of this in a year what would that take what must be true for me to be debt-free a year from now now you know the number it's going to take one thousand five hundred eighty three dollars great now we can at least have a mission and go find that kind of money whether that's through selling stuff working part-time extra cutting our expenses down and then you get more motivated versus let's just see what happens you pre-decide you know you could do that with like i want a million dollar net worth by the time i'm 30 exactly okay how old are you okay 22 okay then you got eight years what must be true over those eight years to be at a million by 30 people who get there that's how they're doing it they're setting a goal and breaking down into little bite-sized pieces how to get there they're not just hoping what must be true listen guys i've heard just about every excuse for why folks think they can't get ahead with money so let's go ahead and settle this right now you get the final say on what happens with your money that's why you have to start telling your money where to go so you can stop wondering where it went so if you're going to start winning with money you have to get on a budget and the easiest way to get started and stick to it is with the every dollar but if you're going to start it'll help you make a plan for every single dollar coming in and every single dollar going out every single month and guess what it's free so no excuses download every dollar in the app store or google play today so jerry is with us in st louis hey jerry what's up hi um i'm actually from effingham illinois okay cool um st louis is the biggest one of the bigger cities close to me that's what they were asking so my question is um been following your plan for years uh my wife actually even taught this you know she came down and was trained and she's even taught this at her previous job wow but my question is i um went to zander got my term life insurance i did the 20-year term next year it comes due um if with the 20 years there is such a big jump oh yeah from 20 to 21 do i even need it after i um by the time i'm done with this i am the term i'll be 62 and my wife is 64 um our investments we have over 2.1 million um if i count my house and some ground probably closer to three hundred thousand dollars a year do i need to reinvest try and find something else or is there something else that i need to do um because i really don't want to jump from no i'm like i'm looking at my pr my premium from 500 and some dollars a year to close to eight thousand dollars a year you know how much was your life insurance what was the death benefit uh 350 000 okay so and jerry i love this call because i don't know if i've ever gotten to do this or not 20 years ago we talked you into buying 20-year level term insurance and doing your own investing with the idea that at the end of 20 years your home would be paid for and your investments would be large enough that your wife would be okay if you died without life insurance and here we are you did it yes and you didn't need to use you're like a poster child man this is great so if you don't if you if you cancel this term insurance and you're you die and your wife has 2.1 million and the land and the house is all paid for i mean can she make it on 200 000 a year oh yeah she's frugal then then you're then you're self-insured right yes because 2.1 should be creating at least a 10 rate of return if it's invested decently agreed yes yes and you're not even using that what does she need to live if you die tomorrow right how much does she need to live a year if you die tomorrow oh god she's like i said i don't know well i mean you got to pay taxes you got to pay your your property taxes insurance she's got to have food lights water she's going to want to go on a cruise and look for a new man i mean heaven forbid gotta factor that it'll be hard to replace you though jerry i'm just saying that is correct yes because my thing i mean i am i know if you died tomorrow could she make it on 100 grand yes and pay her bills we do that now okay ah there we go me and my wife right now we don't we make this year we will make about a hundred thousand that's it i mean from with our jobs um so she's still working really had much yes what does she make working part-time uh she makes probably about 35 to 40 this year okay all right so the bottom line is the investments will create way more per year in income to her if you're not here then she would need is that right yes that is correct okay then you are self-insured my friend well done yes dave doesn't get to say i know and just listening i've been on here for a little while listening to your show today and i actually got a few more things that i'm going to look into with this um after hearing some of the things today but i have been lucky i mean we've not my father was probably dave ramsey 60 years ago um brought up that we did not have debt i've never had really dead except for my house um and i actually my dad borrowed me the money for the house So I've never really had a loan-type thing. If I had to do it again, I probably wouldn't have got it from him with all some of the little strings and stuff attached maybe and that kind of thing. It's water under the bridge now, man. That's long gone. You did it. That's right. That's water under the bridge. You have a $3 million net worth, and you're 62 and 64 years old. You won. Well done, sir. You might need to let loose a little bit. Come on the Ramsey Cruise with us at this point. It sounds like you guys are too frugal for having $3 million. That's amazing. Your wife's working a part-time job. And a great reminder for everyone out there to get term life insurance in place yesterday. You can jump on to Zander.com. It doesn't take long now. Not that expensive. It will get expensive when you get to your 60s, so you need to get out of debt. But the point is by becoming debt-free and building your investments, you do become self-insured, and your need for life insurance is not forever. The only whole life. Insurance need is the agent needs a commission for your whole life. But you don't need insurance for your whole life if you do a good job like he did. So, one more whole life. It's that simple. Yeah, you don't need a $3 million net worth. Caitlin's in Dallas, Texas. Hi, Caitlin. How are you? Hi, I'm good. Super nervous, but I'm excited. This is the first time I've ever called, but I've been listening to your show for like the past two years. Well, thank you for being with us. How can we help? Thank you. So, my husband and I just finished baby step three. So, we have all of our debt paid off, and we have three months in our emergency savings account. Way to go! However, we are not sure. Like, my husband started reinvesting in his retirement. I have not because I, so we're back and forth. We want to save for a down payment on a house. Good. But taking 15% of our income. Is flowing this process down. So, we're not sure which way to go. Do we stop investing in retirement to have the down payment and then reinvest? Or do we just wait a little longer? The eternal conundrum. How long will it take at this rate to save up the down payment? If you guys invest full 15%, how long would it take? So, our goal is a $600,000 home. Uh, 20% of that is $120,000 down payment. Okay. So, we would need $5,000 at least a month for the next five years. Can you do that? For the next five years. Can you do that? Which is our lease. Well, we've renewed our lease for two years. So, that's the goal. Like, yes, we can do that if we stop retirement. So, two years currently. Now, if you paused investing or maybe he just invests up to the match, you split the difference, you could do it in what? 18 months? 19 months? 20 months? I haven't calculated that. So, I'm not exactly sure. Two years is our goal because that's, you know, up until our lease was our goal for renting this house. That's a great goal. And if you have more, that's even better. So, I would just crunch the numbers not to be a nerd, but just to show you, okay, it's delaying it by three months if we invest 15%. Or if we go down to 0% investing, we can get this done six months faster. That just sort of gives you a full range and spectrum so you can make the wisest decision for you. But the truth is, it's a choose-your-own-adventure in Baby Step 3B. Some people choose. Some people choose to invest nothing temporarily. We say two years or less. If it's going to be more than that, you should be investing because that's a long time to go without compound growth. But you guys might decide to split the difference. He invests and you don't. And now we shave off a few months and get into that home sooner. Got it. Okay. And then if we do just continue investing, I'm a little confused on how the – I understand like Roth is not taxed. It's taxed now but not later versus the 401k. There's a lot of limitations. Well, there's a Roth 401k. Does he have that option? He does both. He does his Roth and a 401k. No, the 401k, they have a Roth option sometimes. Most companies now offer that. He should be doing a Roth 401k as well as a Roth. Do match first, Roth second, and only after you've maxed out all of that do you do traditional. Okay. Okay. That's the order. Yeah. Match beats Roth beats traditional. And it sounds like he probably has a Roth 401k through his work. There's a Roth IRA that's outside of an employer and he has access to both. And I'd recommend doing both of those. Up to whatever works for your baby step 3B and still gets you your down payment properly by the two-year mark. So you're really doing this the right way, Caitlin. Good luck. I'll see you next time. I finally get to announce that my brand new book, Building the Marriage You Want, is available for pre-order. If you and your spouse have been feeling like roommates lately, like maybe this thing called our marriage has just run its course, like this is just the way marriage is, I get it. This book is me sitting at the table with you and you and your spouse helping you both take the next right step towards the marriage you both want. Marriage is still worth it. Order now for $24.99 and get over $100 in pre-order bonus items at ramsaysolutions.com slash store. Well, that's interesting. Everyone needs insurance, but it can be hard finding the pros who aren't just looking to make a buck. You need to find agents who are working for you and know their stuff. Ramsey Trusted Insurance Pros are vetted and coached, to make sure they're market experts and they have your best interests at heart. And we've got folks in the Medicare space, we've got folks in the health insurance space, we've got Zander in the term insurance space, and we've got insurance professionals for property and casualty, meaning homeowners and cars all over America that have been vetted by us and are Ramsey Trusted. So connect with a Ramsey Trusted agent on the website at ramsaysolutions.com. We'll see you next time. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Bye. Hi, guys. How are you? What's up? I am a recovering gambling addict. About 44 days clean. Good for you. Thank you. I came clean to my husband about a month ago and about the problem and about the credit card debt that I've racked up. He doesn't believe in credit cards. I told him about the snowball method, but he wasn't on board. So he was. He went and got a loan and we paid him all off and had a plaspectomy. But now, how do I, like, regain his trust? I mean, if anything's come good out of it, we now combine our accounts after 25 years so he can keep an eye on me. We had separate accounts for 25 years and now they're combined just so he can keep an eye on me. Good. But how do I regain his trust? Okay. So congratulations. Thank you. Four days sober. Good for you. I just met a gentleman in the lobby a little bit earlier who showed me his 11-year coin. Nice. 11 years sober. Different situation, but still a coin. Are you doing GA? I am not right now. I have some pre-sessions through my insurance at work with a counselor and I'm going to see her every week. The closest GA meeting to me is pretty far away and it's at night and I can't drive at night. So it makes it difficult. But I am seeing a counselor. Okay. All right. Because if you have an admitted addiction, you need to have someone walk with you. If it's a counselor, that's fine. If it's GA, that's fine. But it requires other human relationships alongside you to bust your chops. Right. It's the only way you stay clean. Well, that and there's like no way I'd be able to gamble right now because now he sees everything. That does. That just, that just, that just, um, bottles it up. It doesn't heal it. I know. I know. Okay. So I want you to get, I want you to dig it all out and he begin the healing process and put the practical things in place, which you've done. So everything you're telling me is very good. Even the tone of your voice is very good in this. So you're, you're heading in the right way. The way you build trust with anyone, rebuild trust with anyone is time. Yeah. You've been clean 44 days. When you've been clean 44 months, he should be treating you. Differently. Yeah. Okay. Uh, if he, you know, and, um, so anytime you do anything that it, that breaks trust or breaks, um, relationship, uh, the only thing is a pattern of cleanliness, uh, over time. And the longer the clean, longer you're clean and the longer you guys are interacting and communicating and talking about money and you're sharing, what you're learning in counseling and he's learning, you know, how to be a husband to, uh, someone who has struggled with this kind of thing, then, um, you know, the longer. that goes on this could be a beautiful beautiful love story it could be a beautiful wealth building story uh 10 years from today but uh to expect him to just suddenly go oh i think you're okay 44 days later nah i wouldn't right and you wouldn't either that's not common sense right but the pattern is there so i'm going to recommend a book called trust oddly enough by dr henry cloud okay he's one of our favorite guys that comes on the air here with us and he wrote a book called boundaries that made him famous he's one of my best friends and um he's just brilliant on this kind of stuff and the whole book talks about how to gain trust how to regain trust after it's been broken but it outlines this idea that of a predictable pattern that's there and um but yeah you said the good thing that came out of it is now we work together on money and so as you are put giving input on money i don't want him just babysitting you or sitting on you like you're like you're not an egg to be hatched okay but i do i do want you working together with full transparency which gives him comfort as he is regaining trust and that's what i'm trying to do i'm trying to make sure that he's not just a little bit of a and that's what i'm trying to do i'm trying to make sure that he's not just a little bit of a and that's what i'm trying to make sure that he's not just a little bit of a that's fair to him right so that's all good so i'll give you one more example because i've been babbling george what before i do that what are you thinking i well the big thing and i've heard dr john deloney talk about this is he gets to set the pace for forgiveness and so you need to ask him hey what does that look like is that we're going to weekly budget meeting for this long and after six months here's what might be unlocked you're going to go to gamblers anonymous every week we're going to do you're going to follow our debt payoff plan and if all things go to plan and and if all things go to plan and if all things go to plan and your intentionality is i think that will naturally cause the forgiveness to happen maybe even at a faster pace yeah so the the in other words out of the abundance of the heart the mouth speaks so when he speaks about this two years from now he would say something if he was talking to someone that you wanted him to tell okay but he would say something like hey katie had a gambling problem and we teamed up and paid off the debt in 18 months right not katie had a gambling problem and i had to pay it off all right you see that because you were emotionally involved in the budget process the sacrifice process to clean up a mess because he can't stand debt and so he's got the willies about that as much as he does about the gambling right definitely yeah and so and you just say that out loud to him i know that i hit you twice i hit you once with the gambling and twice with the debt and so let's work on this together i'm willing to pay you back and i'm willing to pay you back and i'm willing to pay you back and i'm willing to do whatever we got to do to make sure that i a i don't go back but b we get this cleaned up as fast as possible so we can put this in the rearview mirror and have a wonderful life going forward okay so thanks dave yeah lesser story not as important as yours but when i went broke at 28 years old and lost everything my wife had two little babies and her saying was if i asked her i was buying and selling houses said hey i'm looking at a house over here in this area and she would say whatever you want to do i'm willing to pay you back and i'm willing to pay you back whatever you want to do honey and i did whatever i wanted to do and i went and made a mess and i went broke and we lost everything and the lights got cut off at the house and the water got cut off at the house and there's two babies in there and we're in foreclosure and bankruptcy okay can you imagine that this woman was terrified and i had did not trust me she shouldn't i was an idiot okay you don't trust an idiot that's a bad idea and so whatever you want to do honey had to be removed from her vocabulary for the rest of her life and then when we finally started understanding the stuff we teach here we said okay we're going to have an emergency fund in place and i discovered that as we put that emergency fund in place and i looked up and there was ten thousand dollars laying there that it unlocked forgiveness in her because her she felt secure again right and to the point that to this day now almost 40 years later if i'm talking about doing something and she goes okay i don't mind the thing we're talking about but that look in your eye i don't like that scheming and scamming look i don't like you i don't like you chasing a deal let's slow down a little bit and look at that and that's her way of saying you've regained trust but occasionally you remind me of that old version of you and it scares the hell out of me you follow me and and but we're largely healed like 99 but occasionally she'll go no that one that one feels weird and i don't want to go there again and it activates that old scar way back there so you never quite get a hundred percent over it but you can get 99.9 over it that's the moral of that story time plus consistency that's it you should have just answered the question we could have just done that we've been done okay you You spend hours researching before making a major purchase like a home or car but it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets i recommend using ramsey trusted pros whether you're looking for car home or any other type of insurance ramsey trusted providers have been coached and vetted to serve you like we would find what you need at ramsey solutions dot com slash insurance our scripture of the day luke 6:27 28 love your enemies do good to those who hate you bless those who curse you pray for those who mistreat you thomas soul said people say things like the government has to do something i say have you ever studied what happens when the government does something compared to what happens when they don't do anything that's brilliant yeah that's the truth oh giselle is with us in chicago hi giselle how are you hi giselle i mean hi dave um how are you better than i deserve what's up um i'm 21 years old and i'm currently about sixty six thousand dollars in debt honestly i'm embarrassed to admit that because i know i'm young i should be building my future but instead i feel like i'm digging myself into a hole a big part of my debt is my car and my rv i'm realizing that i made some bad financial decisions last year and well this year i'm i got my first big contract me and my boyfriend are making over six uh figs well we're both making about two hundred thousand dollars this year um i'm willing to get rid of my rv and my car i just need some financial guidance i'm also the first from my siblings um to make six figures and it's my first year going on to making six figures wow so you make two hundred thousand dollars on your own uh no i make up about 130 my okay boyfriend as well great yeah your boyfriend's not paying any of your bills so let's separate that out uh yeah we go half and half on them but not on your debts no not on my debts well he gives me half for the rv he helps me pay half of my car why we go half on everything he should he should stop that the car is co-signed on both of our names and the rv is as well okay what's left on the rv what's left on the car loan the rv i got it when i was 19 and they really screwed me over with i was dumb uh we're paying two thousand dollars for rent i didn't want to do that no more um what's left on the balance of the loan 30 000 30k on the rv what about the car what would it sell for the sale was 37 i gave what would you what could you sell the rv for what's it worth oh i just got an offer today for 28 sell it okay do you have the two thousand dollar difference yes i do perfect sell it there goes that payment okay uh-huh what's left on the car loan my car i bought it for 30 i'm down to 23 i just bought it in february what's that worth um i would say about 27 do you like the car it's a brand new car uh i like the car since it's my only vehicle of transportation okay are you gonna get it paid off really really really really fast like six months that's really the goal i know i can i just now that you don't have an rv payment i think you can uh-huh so can you pretend to live like you make fifty thousand dollars and then put the rest of it toward your debts? Because if you just do that alone, you will be unbelievably wealthy. That's called living on less than you make. And with all the margin, you can save up an emergency fund, invest for the future, and never go into debt again. And that's my goal. I really messed up. I'm young. I'm in the point where I could fix it. Yeah, but you make good money, and you're asking good questions. Would you read Georgia's book if we give you one? Oh, yes, of course. I've been reading your books. All day at work, I'm trying not – I deleted the social media. I'm just listening to books all day. I listened to your book recently. I've been listening to a lot of books. That's fantastic. Listen, Giselle. Good for you. I'm glad you did the dumb stuff early. It took me way longer to figure this stuff out. So you're actually ahead of the curve, making six figures at 21. You sell this RV, get rid of the car in six months, save up an emergency fund. You're going to be in great shape. Bethany's in Kansas. Hey, Bethany, what's up? Hello, hello. Hi. How can we help? I'm honored to be talking to you guys right now. You too. Yeah, okay. So we – I work in town and have a part-time job. We're on Baby Steps 456. Sorry, I should have started with that. And my husband farms. And this time of the year, like fall harvest, is when we finally have, like, substantial – well, we finally have income. And we are struggling with wanting to put – Yeah. More on the principle of our main loan than putting, like, the 15% in an actual, like, Roth IRA. What main loan? I mean, I just need a kick either way. What main loan? Like, on our mortgage. Okay. So the farm? Yeah, the farm. Okay. So you have a business loan. I mean, it's not just a house, you know. Yeah, but you have a business loan. How much do you owe on the farm and the house? We're down to $523,000. Yeah. And how much equipment debt do you have? Nothing. Like, we're fine. We are – like, literally, that's our only thing. And now I'm just – Way to go. And what's your household income a year? What are you all making a year? I mean, I usually say $100,000 together. It just depends on the end of the year and how stuff shakes out. You know, some of those are good and some of those aren't. Sure. It depends on the harvest. But, I mean, most of the time, between your day job and his – when you're farming, you make $100,000. Yeah, yeah. That's usually what I say. Okay. So if you invest 15%, that's $15,000. That's, you know, a Roth IRA for each of you. But you're saying, I don't want to do that. I'd rather put that $15,000 towards the mortgage? Exactly. No. Like, on the principal. I wouldn't. I would put the – I would work it – I'd treat it just like it's a business loan or a mortgage. It's a Baby Step 6 issue. No. And in order to hit Baby Step 6, you've got to complete Baby Step 4. Yeah. 4, 5, 6. 4, 5, 6 are done simultaneously. And 4 is 15% of your income into retirement. 5 is kids' colleges addressed. And 6, at some level, do something, $50 or whatever. And then 6 is we begin with any money above that that we can find. Like, if you have a bumper crop one year, you throw all the extra at the mortgage. And if you have a bunch of bonuses at your work, you throw all the extra at the mortgage. And if you have to find some money in your budget, you throw the extra. All of that. But I would just set an intentional goal for Baby Step 6 and say, all right, we'd love to pay it off in seven years. Here's what that's going to take. We want to put at least this much on the mortgage each month. And then, like Dave said, if you've got extra, it's going to speed up the process. But that, I think, will tide you over. I can tell you really want to knock out that mortgage. I think what you just need right now is a goal to aim for. Yeah. And beware of the curse of the farmer, the $500,000 combine, and the buying the piece of property. The next door to expand for another $600,000 in debt. These are the two things that are going to come at you. And beware of those. Those are the things that take small farm, even large corporate farms, and put them out of business. And you're a small farm. Is it this idea that, well, we could scale and then double the income if we just did X, Y, Z? If we just doubled the risk and doubled the debt and doubled our chances of failure. Yeah. This is the problem. But if you're farming, you can. You can do anything you want, because Dave just doesn't understand farming. Well, farming is a freaking business. Okay. And I definitely understand business and you're not exempt from the rules of business just because you grow corn. Sorry. I respect farmers. It's hard work. I love you. I'm glad you're out there, but this crap that Dave Ramsey doesn't understand it. I don't understand farming. I don't farm for a living, but I do understand business. We coach 10,000 small businesses at Ramsey. So definitely know how to look at a freaking P and L, and I definitely know when somebody's running risk out there, yin, yang, and most of you guys do. So we write that, write that in your comments. Okay. A lot of the small businesses we coach are in the agricultural space. So they're, they're dealing with some of this. And if they do a debt free, keep a debt free. Some of them are a guy I talked to the other day, one of our guys, he's not agriculture, but he's got equipment because he's running large dirt, moving stuff. And he's got all of his equipment paid millions of dollars worth. It's all paid off. Yeah. And he's profits went through the roof and, um, his, one of his competitors just failed from too much debt. And he said, he's sitting on so much cash. He bought them out for pennies on the dollar. Yeah. This is what happens when you work with the other way. It's amazing how being debt free gives you those kinds of options. Shocking. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of peace. Christ. Jesus.