Your Goals Need Numbers, Not Wishes

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life from the Ramsey Network, send the credit. Bear Wins Credit Union Studio, this is The Ramsey Show. I'm Dave Ramsey, Rachel Cruz, Ramsey personality, number one best-selling author, co-host of Smart Money Happy Hour on The Ramsey Network, and my daughter is my co-host today. Ryan is with us in Chicago. So my question is, can I save more than $1,000 before baby step two? What's the purpose? Is something happening? Is there going to be a job change? Are you guys expecting a baby? What's the reason? So, no problem. So I'm 34 years old, no mortgage, no kids, no personal loans. I did just transfer to another location, same job, to move towards my family. So I have about, I'm just thinking about, do I pay off debt before saving or try to do a little care? I'm misunderstood. You said you had no personal loans. No, I meant, I'm sorry. Like actually from a lender, but I do have two personal loans, a student and car. My apologies. Okay. How much in student loans? Those are personal loans. Okay. How much in student loans, dad, is it? $23,000. Okay. And in the car? $23,000. Both? Yes, each. $23,000 each. Okay. And what do you make? Take home is $2,800 a month. Okay. And you already made the move? So you're, you're settled, or you're about to? I'm about to in about two weeks. Okay. Gotcha. And how much do you have in savings? Um, I have 90,000 in 401k and 3,000 in investments, nothing in savings. 3,000. What's the investments? What's the 3,000? Is that retirement? Like a Roth or is it just a brokerage account? Just a brokerage account. Okay. How are you planning on cash flowing the move with? Well, fortunately. Um, it actually won't cost me any money to move. Um, my family's going to help me. So the moving is actually not going to be difficult and I'm actually going to get paid the same and I'm going to start there just like kind of the lateral move. Okay. So they're jumping in, helping with the physical move and you're moving from where to where? Um, Northern Wisconsin to Illinois. Okay. Gotcha. I mean, if I were you, Ryan, I'm okay. I'm okay if you don't do anything for two weeks when it comes to the baby steps, get moved, uh, start the new job, settle in. And then once everything is there, then yeah, I would, I would start with taking 2,000 out of that investment account and throwing it at this debt. And, um, and you're making 2,800 a month. Is that what you said? Yeah. Yeah. So it'll be, your income is going to be a major factor in you getting out of this debt. I mean, it's, yeah, I mean, $46,000. And so you finding any money. Because you probably are not, you're not going to have a ton of margin. Um, I'm assuming after rents and food and everything. Is the trajectory on this job going to take this income up pretty quickly? Cause you're not making much. I understand. Um, the trajectory is actually a lateral move. No, I mean, after you make the move, are you going to be making double this in two years or something? Uh, that is my goal. I'm planning to kind of do some studying and, and internally with my company and hopefully move up in to another position. What kind of job is that Ryan? Uh, ironically, low level finance position. Okay. Okay. Yeah. Um, well, as there's another thing coming into play too here is you have a car you can't afford. I mean, you make $40,000 a year. You have a $23,000 car. That's just ridiculous. So unless your income is going to come up pretty dramatically. Pretty quickly over the next two or three years, this car is going to really hold you back. And, uh, I'm going to, if I'm you, I'm going to look at selling that car, not, not this week and not anything like that. But I mean, six months from now, you're settling in. You're going to see that what Rachel said is true. There's not a lot of wiggle room in this math to be able to aggressively attack this debt. And I don't want you hanging out in this debt for like three years or five years or something. So, um, I'm going to take extra jobs. I'm going to move up. I'm going to move up through the company. We're going to get this income up to double pretty quick with side hustles or whatever and start really chunking on this because then the thousand dollars doesn't become a thing. Cause we're not suggesting people keep a thousand dollars as a permanent plan. This is just while you're getting rid of your debt and totally focusing on your debt. And honestly, the difference in 2000 or 3000 and 1000 is, is nothing. So it's, it's not even symbolic. It's, it's so, I mean, if you have a problem. It's, and it's $8,000 problem of some kind, some kind of an $8,000 emergency. You're just as screwed with three as you are with one. So the purpose of the one is not to, because it's enough. It's just, we're going to take it down and we're going to completely focus on getting out of debt. And that would include getting your income way up and very possibly selling this car to get this stuff cleaned up. Cause you are not making any money. Cause if you sell the car, Ryan, and get a beater, $2,000 extra a month, just because you're not making any money. You're not going to this debt you're out in a year. So, I mean, if you can do this quickly, that, I mean, that, that's, that's the point of the intensity. It's going to cost you another year living on the edge. If you keep the car at least. And I don't know. And that's, and that living on the edge, meaning you're not doing anything, but working all the time with your extra jobs and everything else. And that's what it's going to take. So I personally wouldn't do that for a car. Melissa's in San Antonio. Hey, Melissa, how are you? Hi, Dave. Rachel. How are y'all better than we deserve? What's up? Go ahead. I just have a question. Um, is there ever a time on baby four or five and six that you baby steps four or five and six that you would, um, be okay with not investing the full 15% into retirement? Why do we not want to be wealthy? We do want to be wealthy. Um, my husband and I have been listening for, um, about a year. We paid off a hundred thousand dollars in debt. Um, and we are, um, we've built. Our emergency fund and I have, um, a kid that we have four children, one is in college and we did not plan well for college. And, um, so we're trying to get him through, um, without student loan debt and it's just a little tight. So I didn't know if there was like for a short, um, time, if you would ever suggest. I don't, I don't suggest it. Instead, I'm probably going to think about where he's going to school and how much that costs. Yeah. He's going to an institution. State schools, small schools, it is commercial aviation. Um, and so, um, unfortunately, um, that's a little expensive and our, our college, he has a college fund, but it's just not going to cover it. And so we were going to try to. Yeah. And what's your household income? 300,000. Okay. And this kid's looking for a hundred grand, right? Yeah. Yeah. And he's, he's already, so he used his college fund. He's on year two, but the college fund is about gone. And so. How many kids do you have? How many years is, how many years is that? He needs another 50 grand. Yeah. Yes. Sure. Mm-hmm. I think you can cashflow the 50 grand and put 15% in. You just got to decide that him going to school is a priority over your lifestyle. Yeah. Cutting lifestyle before cutting retirement. I would. Um, I mean, you can do it if you want. It's your life, but the math on it is not good. And, um. When they make 300, so. Yeah. I'm just saying the math on cutting it. Oh, yeah, yeah, yeah, yeah. Cutting back on retirement. Cutting back on retirement is not, it's not appealing. Yeah. Yeah. If you're already enrolled in a Medicare plan, you might think there's nothing else to do. You're good to go. Wrong. The fact is, Medicare premiums, networks, prescription coverage, and benefits can all change, even if your health doesn't. So doing nothing could cost you hundreds or even thousands of dollars a year. With annual enrollment time coming soon, you need to talk to Chapter right away. Chapter is the only Ramsey-trusted Medicare advisor, and they save Ramsey fans an average of $1,100 a year. They explain your options simply and help make the smartest decision for your situation. And whether they find you a better plan or confirm you're already in the right one, Chapter's services don't cost you a thing. Medicare annual enrollment runs October 15th through December 7th. So review your plan with Chapter now and avoid expensive mistakes later. To talk to the unbiased Medicare expert, go to AskChapter.org or click the link. in the description. That's askchapter.org slash Ramsey. If you're working the baby steps, that's the best and fastest way to get out of debt and into wealth. And the best and fastest way to work them is by using EveryDollar. And it's more than just a budgeting app. The plan, the Ramsey plan, is built into it. Helps you track your progress against the baby steps, plus get personalized recommendations and coaching for your situation. It's like having one of us walking with you every day. Start EveryDollar for free by downloading it in the App Store or Google Play. Michelle is in Toronto. Hi, Michelle. How are you? Hi, good. Can you hear me? Absolutely. How can we help? Thanks for taking my call. So I'm currently working on my baby steps. I'm working in a job that I don't like, but I make good money. And I'm looking into switching into the trades. I have an opportunity for an apprenticeship, but it would be free. But I wouldn't be working for three months. I'm in baby step two, and I just don't know if I should take the opportunity and invest in my future that way. No. Okay. You don't quit your job and make no money when you're deep in debt. You keep working and you get the debt cleared so that you can quit your job. And so what is, what are you doing now? I'm a city bus driver. Okay. And what would you be doing when you take the new position? So it's an apprenticeship program. I would be working part-time. It would be free. It would be for construction and then an apprenticeship, a paid apprenticeship after the three months. And then eventually I would. I'm sorry. What in construction requires an apprenticeship? So in Canada, you do like construction for carpentry, electrician, all of that. So you learn a little bit of everything. And then they place you with the union for an apprenticeship with them in an area that you excel in. Okay. And how much would you be making after the three months? They usually start at 33 an hour, but it goes up because you would continually grow. What are you making now? What are you making now an hour as a bus driver? With overtime last year, I made 80,000. I take 1,900 bi-weekly. Bi-weekly. Okay. So this is after the apprenticeship is a break-even, right? Yeah, but I don't like what I'm doing right now. So that's what's really pushing me to try to. How much debt do you have?. maneuver that way? I'm 15,000 right now. I have a car and a credit card. Okay. How much is the car debt? I owe 6,000 on it. Okay. And nine on a credit card. Okay. Yeah, I'm just going to roll up my sleeves and knock those two things out and then save up a good down payment. How were you planning on living while you made no money? I would work part-time where I will currently work as a casual, and I currently live with my parents. So I would just. Yeah. How old are you? I'm 33. Okay. All right. The other thing I want you to think about while you're doing this, yes, I would clear off the debt. I went into an apprenticeship and cut my pay dramatically. You need the money to clear the debt, but you should be able to clear it really fast. You've got no overhead. You're making $80,000 and you only need 15. So you should do this in just a matter of months, not a matter of years. Okay. Mathematically, you should. And then the other thing I want you to investigate is the only thing you've looked at is the union track. And I am sure that they're. I'm not positive, but I'm not positive. That they're. I'm not positive, but I feel relatively sure that it's somewhat like the states and that you can go the union route or you can go the non-union route, which by the way, will put you to work a lot faster. And so I would investigate going to work on a construction site and start making $30 an hour and just like that. And then we'll start to learn while you're there. Yeah. Do some investigation. Yeah. Investigating in that field, Michelle, before you make that decision. But honestly, yeah, if you're bringing around probably 6,000 home a month-ish, if you can throw 4,000 at this, you're done in, I mean, four months. So then we can pick up the internship and look to see in the future. Because I would want you to change jobs. I understand if you just, if you hate it and that's not a way to do life, but for four months, I would do that in overtime, like what you're doing and just get this debt knocked out. Yeah. Because if you don't have the debt hanging over you while you're trying to make the transition, you're more likely to pull it off. And I want you to pull it off. I agree with the move. I just, I'm not going to hop, you know, immediately on that. So, well, let's clear the debt and then move in that direction. Ashley's in Peoria. Hey, Ashley, what's up? Hi, good to talk to you guys. You too. How can we help? So, we were lucky enough during COVID to refinance for a 15-year loan at a 1.75%. Wow. So, we have eight years left and we owe $86,000 on our house. We used to homeschool, but now my girls are going to private school, like 15 to 20 miles away. And because of that, I am going into town two to three times a day. The last two days, it was 80 miles per day. You just never know, no miles per day or whatnot. So, my question would be for both of you, would it make sense for us to just get rid of our 1.75 that we only have eight more years left and move into town where we would be closer to the girls' school? We would not be able to, you know, be in the car so much. My youngest is not even in kindergarten year yet. My oldest is a freshman. So, I do have, I shouldn't say a lot more years to do this, but 12, you know, if you stay at that school and stay in that house, it's 12 years from kindergarten to senior year. Yeah, exactly. Do you work, Ashley, or your husband? Yeah. So, I currently stay home. Obviously, next year when she's in kindergarten might be a little different. But yes, my husband does work full-time and he brings in like $2,300. Why are you making five trips a day? Well, I'm not making five trips. I'm making at least three. Why? To driving there and then picking them up. And then in the evening, I might be having piano or one of the girls might have golf or we might have something at church. So, we're. Yeah, back and forth. I agree with you where you're like, why are you even doing this? Piano is at the school? Piano is at a local college. Oh, so this has nothing to do with the school decision. No, no, no. Golf is at the school? Well, golf is at through school, but at a golf course. Yeah, but I mean, it's through the school. Okay. And church obviously is separate. So, the piano and the church was already there. Yes. You were already. Basically, your life is 20 miles from where you guys live. Yeah, yeah. Especially, we want to be more involved. We want to be more involved in the school. We want to be more involved in church. There's just things that we want there. Sure. So, have you guys looked at houses? Are you able to afford the move? Well, that was the question. Our mortgage would go up $1,000. Okay. Why? Based on. Not based on interest rate. Well, our. $80,000 at 4% change in interest rate is not $1,000. Well, you have. You're moving. You're moving up in price. Well, yeah, because we bought this house for $150,000. Yeah, because they bought their house at the. No, no, no, no, no. They sell this house, and they have an $80,000 mortgage. If they go get an $80,000 mortgage in downtown at 6%, it is not a $1,000 swing. You're trying to move up in house while you're doing all these other things. You can't afford to do that. Well, we don't know yet. What's the. You guys. What hits your bank account every month? $4,600? Yes, and then he does have the aid disability of $760. Okay. Okay. So, and then the new mortgage would be what? Well, they're, you know, an estimate of $2,100, but that's with insurance and property taxes. Yeah. And at a rate of. Not on $80,000, it's not. No, but what the. They're moving up in price. Yes, probably because it's a nicer. It's a nicer area. Is that right, Ashley? Yeah, and you can't afford to do that and the private schools. You don't. You cannot take a mortgage at 50% of your income because you chose to move your children into a school that you can't afford in a place where you can't afford to live. No, you can't just keep doing, I can't afford, I can't afford, but I want to. No, I would not do that. Because of the. I'm not going to double. I'm not going to have a mortgage that's 50% of your take-home pay. Yeah, I agree. That's what I was trying to get to the bottom of. So, Ashley, no, you can't. Yeah, you can't afford it. No. I'm sorry. No, you can find another house that you can move into. And have an $80,000 mortgage at 6%. Yes, I would do that. If you're behind on your bills, doing more of the same isn't going to fix it. You need a different plan. And that's why I tell people about Guardian Litigation Group. If you've missed payments, if collectors are calling nonstop, or if you're getting letters about legal action, that's your signal. And it's where a lot of people wait too long, because the longer you wait, the fewer options you usually have. And once it turns into a lawsuit, things can get more expensive and more complicated fast. Guardian Litigation is a law firm, not a call center. From day one, you are assigned an attorney who represents you. So if a creditor moves forward, you're not caught off guard, and you're not hit with surprise legal fees. Guardian Litigation only gets paid when the debt is negotiated and the client accepts. The settlement offer. This is about stepping in early while you still have leverage. Don't ignore the problem. Take control of it. Go to GuardianLit.com slash Ramsey right now. That's GuardianLit.com slash Ramsey. Attorney advertising. Results may vary and no specific outcome is guaranteed. ♪ music playing ♪ ♪ music playing ♪ ♪ music playing ♪ Caroline is in Dallas, Texas. Hi, Caroline. How are you? Hey, I'm well. Thank you so much for answering my question today. We'll try. Thanks. I want to buy a horse, and my financial advisor told me I need to grow my investment portfolio a little bit more before I can afford it. And I feel like I can afford it. So I wanted to just get a second opinion from you all. Okay. What's the size of your investment portfolio? The size of the horse. I don't know why. Yeah, okay. Big horse, small horse, Caroline. It's a quarter horse. It's going to be a show horse, a reigning show horse. That's big here in Texas. And so reigning is a thing here, is a type of horseback riding. But anyway, it'll be a show horse. And my investment portfolio, to answer your question, is $7 million. My net worth is $8 million. And you're a screener. Ask me how much I've been earning on that. And I actually went – I told them about 14%. But I went and looked it up, and it's 16.47% that I've earned year over year. That would be bright. And so – Yeah. Okay. And how much is this reigning quarter horse? Yeah, so it's going to be somewhere around $75,000. It might be more. It might be less. Okay. I don't know why your financial advisor even gets a vote. But you're a lady that has $7, $8 million, and she wants to spend $75,000. Well, thank you for that. And I – but here's the thing, the ongoing upkeep. And the reason he gets a vote is I trust him, and I ask him the question. So, I mean, I rang his bell and asked him. How much is the upkeep yearly? The answer is he wouldn't do it if it was him. But the answer is not you can't afford it. You can afford it. Now, if you're not a horse person, you might not view this as wise. But you're a horse person, and it's where you want to burn some money. You're getting ready to put $150,000 in the middle of the floor and burn it. That's right. That's exactly right. But if you've got $7 million, you can do that. It doesn't matter. Yeah. How much is it a year, Caroline, with everything? Boarding, grooming? Yeah, it's at least $45,000 a year if everything goes right, which when does ever anything go right? No. Yeah, it's $45,000. $45,000 a year. Are you working? Are you retired? No, I'm not working. I am a young retiree. I'm 54 years old, and so I need my investment portfolio to last for the rest of my life. Don't have kids. Don't have a husband. If your investment portfolio makes 10% a year, you make $700,000 a year. Okay. Right? So I should be able to afford a horse, right? Yeah. Yeah. But just remember, though, when it comes to horses. Yeah. When it comes to horses, it's like a lot of things. It's like my cars and my guns and some other things. The first one is the gateway drug. Oh, yes. I've had horses. This is going to be a problem. It's going to get worse. So before we're going to. Yeah, they're like potato chips. I'm a recent widow, and so my husband always worked and had a big job, and so we were able to afford horses, and it was fine because he had an income. But now I don't have. You have a $700,000 annual income. Right. Other than that. Other than that. I don't have a job. What's your house situation, Caroline? Do you own your house? Are you still paying on the mortgage? I still have a $140,000 mortgage. Why? And I need. It takes me about. Because that's what my husband did. My recently departed husband, we had a very low, less than 2% interest rate. So he was just like, let's just pay it off, you know, over 15 years. Wow. That kind of thing. So I might pay off my house. I know you still. I would pay off your house, and because you want the horse, you should buy the horse. You can afford it. I just want you to. I buy some things that are absolutely. Everyone buys some things that are absolutely ridiculous, meaning that we just take the money and burn it in the middle of the floor. It's just a. It's ridiculous consumption, right? We all do. And the only question is, does it harm your life when you do that? Okay. That's the question. And this doesn't. This does not harm your life. $150,000, 75 for the horse, and the next two years of upkeep gets you to $150,000 real quick, right? Burning $150,000 in your fireplace tonight, your life would not change one ounce. Okay. And $45,000 a year for the upkeep ongoing doesn't change. $700,000 a year coming in. I think if. I think in the future, I would want my financial advisor to phrase differently so I don't fire him. He should say. He should say, you can afford to do this, but you need to understand that you are completely burning this money in the middle of the floor. If you understand that, and you feel like you're going to be okay, mathematically, you're going to be okay. But you can't do this 10 times. You can do it once. We don't go to a million five. We're not going to a million five on this. Yeah, I want to keep it going a year over. You know what I mean? I want to keep it. No, I'm saying. Probably four to six years, I'm going to buy another horse and retire the other one. And the retire. Well, if you live on considerably less than $700,000 and you end up with $14 million and you want to buy another horse then, I think you'll be fine. Okay. Yeah, but just. Because some of my portfolio is in IRAs, like about half of it's in an IRA that I can't really touch without getting a big tax. Yeah, but it's growing at that rate, is my point. You are not going backwards. You're going forward. Yeah, and that's seven years, so you can get to it, so. Yeah, and seven years from now, it will have doubled if it's continuing at 10% or greater. And so, your seven will be 14, seven years from now, if you're earning 10 or greater. And you have been. So, you've got a good portfolio. And so, the question is, if you booked a $200,000, four seasons, or Ritz, private jet around the world, which is actually available for about that, it would be the same thing. I'm going to travel around the world for the next six months by private jet, and I'm going to book it through four seasons or Ritz. They both have it, okay? And it'd be the same exact thing. You're just burning the money. Yeah, but that's triple what she's paying for the trip. No, she's $200,000, I said, and she's paying $150,000. But that's over. Yeah. I mean, she's going to pay $75,000, and then she's got $250,000. She's going to have two years of upkeep. She's going to have $150,000, $200,000 in the source in a heartbeat. Yeah. And ongoing. The upkeep is $45,000. Yeah, yeah, yeah. All that's safe. But if you have $7 million, and you want to go on a $200,000 trip, you can do it. You can do that. Yes, yes. That's my point. Yep. Now, would your financial advisor agree with that? Obviously, he wouldn't. You know, but he doesn't get a. Hers, you mean. Her financial advisor. Yeah, yeah, yeah. He doesn't get a vote on that stuff. You know, he just is there to help me understand the math and, you know, let's couch this decision looking at what it does to the arithmetic. Does this harm my life? I wonder why he would tell her. Well, I'll give you. Let's give him the benefit of the doubt for a second. Yeah. Okay, I'll be nice. He might be. Her husband just passed away. He's been coaching both of them for years. He might be afraid she's buying this out of grief, and he might be trying to protect her as a widow. From a large purchase. From making a large purchase while, you know, and because maybe she, if her husband was here, maybe they wouldn't have done this purchase or whatever. He may be kind of standing in there trying to love her well. Right, right. That may be what it is. But that's a different thing than to say you can't afford it and you need your portfolio to grow. That sounds parental, and you're not my parent. You're my financial advisor. Yep, yep. And so you don't. Folks, the relationship. always want with your financial advisor not parental it's teacher so it's like i worry about you if you're going to spend two million dollars and you've got seven i think that's unwise i think you're going to make some i think you're going to regret that and here's why here's how that destroys your nest egg and messes with it but um but you also could say to her instead of saying you can't afford it you know hey you just lost so and so you know a year and a half two years ago and make sure you're not doing this from a place of grief you're not medicating the grief somehow yeah yeah and i'm worried about you and i care about you that would be an okay position right that's a brotherly position rather than a yes than a parental position well glad caroline called when george camel wasn't on because he'd be like george yeah because george george is just no horse guy he has he's on all i think he would even tell caroline she can buy the horse he would but he would he would he would be because he's on all the under the desk he's under the he's on the hate list of all the horse people websites hey george camel here a few years ago someone stole my identity and let me tell you that is not a quick fix it takes hours on the phone piles of paperwork and a whole lot of stress trying to untangle the mess and even after that there's this nagging paranoia because your information is already out there and the truth is you can do all the right things and still become a victim that's how common identity theft is and that's why i'm glad i had zander's identity theft protection when my identity was stolen their team stepped in right away they were monitoring my information and caught the issue and their u.s-based recovery specialists help handle the calls the paperwork the cleanup so i didn't have to do it all on my own zander also includes up to two years of work and a whole lot of stress trying to untangle the mess and i have two million dollars in stolen funds and expense reimbursement and with the family plan your kids are covered for free you work too hard to let identity theft steal your time your money and your peace of mind so go to zander.com to enroll today or call 800-356-4282 heathers in chicago hi heather how are you i'm doing okay how are you guys doing better than we deserve what's up okay um so my question is um where i don't even know where to start um i've just recently learned about you and started watching a few of your videos and i saw the baby steps video and i know that step one is save a thousand dollars my problem is i have absolutely nothing and when i say i have nothing i mean like when it was due tuesday i get paid tomorrow and i'm still going to be three hundred hours short um and i don't know where to start but i don't i don't want to live like that how did you get to this place um divorce uh majority of my life i was an at-home mom taking care of my kids and so uh when i got divorced i was working a part-time job had no benefits and i have a decent job now um what do you make now um i bring home about 2100 a month after taxes um which is incredible great but it does offer benefits and um and you had nothing in the divorce heather uh i did and i what i got i used to pay off one of my student loans which was about thirty thousand dollars but i still have probably about twenty thousand dollars in student loan debt which also scares me because i heard you say on one of your videos do not take out a student loan because you can't get rid of them um i can't get rid of them with bankruptcy you gotta get rid of them by paying it off how long you've been how long have you been divorced uh a little over three years now okay and do you have kids i do but they're both adults are you getting any alimony no i don't get any alimony where i'm at that's not a thing are you the screen says you're in chicago are you in chicago proper or in a suburb um i'm actually in chicago and i'm living in chicago and i'm living in chicago and i'm living in in indiana but they asked what the closest major city thank you that's why i asked because that's what i know yeah so indiana you don't it's it well i mean she's not got illinois taxes and uh probably a little different economy micro economy that you're sitting in versus in chicago itself more likely you can make it on 2100 there than you could downtown chicago that's my point so um yeah barely yeah what are you doing what are you doing what's your what's your job um so i work for a uh major healthcare company and i work in a call center for them good okay good for you is there um how long have you how long have you been with them uh it'll be two years in march two years okay and do you see forward progress at that company to get to get your income up to move up yeah so like in october so i started you know almost two years ago march okay and then six months later um i got a like a promotion within the department good and got a a pay raise and now it's yearly so now in october next month i'll get a review again and get a pay increase but i don't know what that'll be and you're working 40 hours yes at least we're offered overtime the first of every month and i always try and get at least eight hours of overtime in depending on what day of the week the first falls on okay so so you're bringing home 2100 a month how much is your rent my rent is 1320 a month i'm in an apartment um and that's typically what the rent is going for in any safe neighborhood okay the bad the bad news in your overall situation is you you described it accurately this is a really really tough spot that you're in the good news is this is the worst it's ever going to be and i hope so oh i promise you i promise you so you've got two hurdles that i hear and we'll see what rachel wants to add or subtract from that uh hurdle number one that i hear is um you guys were married a long time your heart is broken uh you're grieving you're angry and you're still healing from you know getting muddy boots trampling on your heart and uh and with that part of that healing is getting your personal confidence up to say i'm going to win again chapter two of my life the encore after the curtain comes down and the curtain comes back up the encore is going to be amazing i just haven't figured it out yet and your heart hasn't gotten to that yet that level of belief but i will tell you this i've been doing this about 35 years and i've seen ladies at exactly your age have the best decade of their entire life overall but certainly including income from 53 to 63. i see it all the time because of the stuff the gravel that is in your belly you got the right stuff inside of you you just don't believe it again yet and as that starts to wake up you're going to go be somebody you never even dreamed you would be over the next 10 years i've seen it happen over and over again okay so i see that in your future more than you do at this moment so that's one hurdle you've got to overcome the second hurdle is we've got to work on this income because you're starving to death you got to pick up overtime side jobs everything else you got no margin in this math this math is hard hard hard hard hard hard so and so i you know and the the if you had another two thousand dollars a month coming in your whole life would change right now because the difference in 2100 and 4100 in your world is so huge it would just so i mean working all the time at something that's moral and legal and makes good money starting with all the overtime you can get not just eight hours i want eight hours a day how much will you work me i need money okay and this is not a way of life for the next 10 years this is for the next six months so you can pile up a little money in the corner and and know you get to eat next month because you live from fear to fear hand to hand mouth to mouth right now agreed yeah and and if you had ten thousand dollars in the bank your whole attitude the way you walk down the street would shift yeah and it'd be part of your healing as well which i really desire for you after talking to you. I think you're special. Yeah. I mean, it's from the financial standpoint, how they're fighting for that piece and having some safety. That's your next goal at this point. Yes. I'm not worried about the $20,000 student loan. I'm worried about Heather having a little margin, a little wiggle room or a lot of wiggle room. I'd like for you to just kind of slosh around in the cash for a few minutes. Like you've just got a little pile of it for the first time in a while. Instead of worrying about, you know, whether we're going to get, you know, canned tuna fish or canned denty more or whatever it is you're having to choose between. I mean, yuck, right? I mean, this is tough right now. These numbers are hard. So I'll tell you the other thing I would do is I would make sure I'm, if I'm you, I would be make sure I'm plugged into a good church and get some people around me that begin to love me and believe in me that don't mind if you scream and cuss a little bit, don't mind if you cry a little bit. And they might take you to dinner occasionally and just tell you, tell you what I've been telling you for the last few minutes that you're a child of God and I see a good future for you. And I'd like for you to have that in your life too. Yeah. And I do, I have, I do have a wonderful, a wonderful church family. I do. Yeah. Well, lean on them, lean on them. They, they, they, you know, it's an opportunity for them to love someone well. And I'm not saying become a permanent charity case, but girl, you in a hurt right now. Yeah. Let people love you. And it's okay to be loved while you in a hurt, you know? And then later on, you're going to be to have a, you're going to have $10 million in the bank and you're going to find a Heather somewhere and you'll help her. That's right. Amen. But yeah, you're in a, you're in an exhausting place, Heather, emotionally, financially, the hours you're going to be working, it's going to be tiring, but even if you can put a hundred bucks a week away, I mean, you look up in two months and you're like, there's 800 bucks like that, that even in and of itself is like, okay, we need some moving progress. I need the math to get me back from the edge of terror. Yeah. If you're shopping online and these days, everybody does data brokers are out there right now, buying and selling your personal information, your phone number, your home address, your email without your knowledge or consent. And that puts you at risk for spam calls, scam texts, and fraud combined with AI. Those scams are getting more sophisticated every day and trying to get it under control yourself is basically impossible unless you have delete me, delete me goes to hundreds of these creepy data broker sites, find your info and removes it. And you never have to lift a finger. Plus they keep monitoring for it and removing it. If, and when it pops up again, you don't have to remove your own info. Every time it pops up like some unwinnable game, whack-a-mole, I personally use and love delete me and my scammy texts and spammy calls have gone way down. Trust delete me to smack down data brokers and protect your personal info. So the game of whack-a-mole can finally stop. Go to join delete me.com slash Ramsey, and you'll get 20% off an annual plan. That's join J O I N delete me.com slash Ramsey, or click the link in the description. Welcome back to the Ramsey show and the fair winds credit union studio. James is in New York city. Hi James. How are you? I'm better than I deserve. Dave, how are you doing? Just the same, sir. How can I help? I'm glad to hear that. I'll go right into it. It's great to talk to you. I've been listening to you for about a year now, watching your show every day while I run. Thank you. About eight years ago, I started trying to buy a real estate, you know, with, you know, saving 20 or 30% down payments. And borrowing money from friends to be able to buy. I know it's a huge mistake now, and it's not what TikTok says that it is. In the same time, my cousin asked for money to do the same. And I borrowed about $300 on her behalf from my network so that she can also grow her portfolio. Fast forward to now, real estate is the opposite of what TikTok says. I am also married and we are planning a wedding next year. I paid off over $600 of real estate debt that I borrowed from my friends after listening to you guys for the last two years. Wow. And I also have about, I also have five of my rental properties have been paid off. Wow. That's amazing. And I'm working, thank you. And I'm trying, actively working towards becoming debt-free with all of my real estate and all of my debts. Amazing. I do have some debt outstanding. And I still have, so I paid off all the debt that I borrowed from friends. And I only have mortgages on about 15 of my rental properties. But the balance that my cousin borrowed is $1,000. Is still outstanding. And she hasn't made any interest payments in over 18 months. And she also got, she got foreclosed on all of her houses. And with a wedding to pay for next year, newly married, I'm thinking, should I sell some of my real estate to pay off her debt and start over from scratch? Or should I wait it out and pay it off little by little? Did you borrow the money on her behalf or she borrowed money? You had $300,000 cash that you lent her. So the same people that I borrowed from, to start my own portfolio, I borrowed from them so that I can give to her. And I think it's fairly easy to figure out she's not going to pay this. So, no. And so you're going to have to. Some of her house is foreclosed on. So I am on the hook for that. Yeah. So how are you going to pay the $300,000? Now, the numbers you're throwing around are amazing. Congratulations on your change in direction. So you paid off $600,000 already. How did you do that? Little by little, I've just been saving up cash from the real estate income that's been coming in, my regular W-2 job. And I also sold a couple houses. In what period of time did you pay off $600,000 doing that? Two years. In the last 30 months. Okay. So why could you not just continue on that track and clear this $300,000? I still have 15 houses with mortgages on them. But you paid off $600,000? You paid off $600,000. In your current situation, you paid off $600,000 in 30 months. Right? Yeah. And you sold a couple properties and you cash flowed the rest of it out of the rentals, right? Yeah. So you've still got that cash flow and you can sell one other rental or two other rentals and do that. How much are you making a month, James? They vary. It's usually anywhere between $20,000 to about $28,000. After mortgages, utilities, and taxes is paid out. And then your personal W-2 income is what? $180,000. Yeah. Good job. Okay. Well, so overall, let's just say this, okay? You got 15 still mortgaged, you make $108,000, you've got cash flow because you got a bunch of them paid off, and you have a $300,000 unsecured loan hanging over your head like a knife that I need to clear. That's the overall picture, and so what would I do in that overall picture, not just the $300,000, but everything else, I would lay out a game plan and say, "In X number of years, I want to be 100% debt-free with my real estate portfolio." Now, what I would suggest you do is play with the math because you're good at it. I've been listening to you. You've got this dialed in. You know where you are and you know how you got there. So this is a gift you've got. You like math riddles almost. Right? So lay out this math riddle and say, "How many properties do I have to sell and which ones would I sell of the ones that are mortgaged in order to be 100% debt-free in three years?" Because the 15 that have mortgages also have equity. So you don't have to sell them all to clear the mortgages. You would sell the ones you hate the most or that have the most equity because you want to get the most traction. Okay? So let's just use an example. I've got to sell seven of the 15 that are mortgaged to clear the 300 grand and clear the other eight. And I can do that in three years. Well, that's one thing to consider. What if I waited and went a little slower and I took five years? Oh, then I've only got to sell five of them or whatever the number is. I'm making that number up. It's probably not that far off. But you know, lay you out a three-year plan. What would have to be true? What would I have to sell? And what would I have to do with the cash flows to clear the 300 grand and to clear all mortgages in three years? What would I have to do? What would have to be true to do all mortgages in five years? And then you decide which one of those programs you want to work. I'm okay with either one of those two. I'm going to stay in debt the rest of my life. That's the only time I would yell at you. Yeah, but you're not urgent right now. No, no. Because it's real estate. He could clear the 300. But if it was credit card debt. If it was student loan debt, we'd be having a different discussion or student loan debt. Yeah, but he's got the ability to retain some of this portfolio. He doesn't have to destroy it. You don't have to burn it down to clear it. Because you've already made progress on my idea when it wasn't my idea, right? Yeah. So I've been trying to pay it off and I've been mainly focused on my own debt. But now I'm just thinking there's just no way that she's ever going to pay it back. Honey, let's just change the name. name on that. That is not her debt. You borrowed it. what you did with it was really stupid but you borrowed it it's your debt you you gave it to an incompetent real estate investor who happens to be kin to you and you lost your money that you borrowed so it's not her debt she's not gonna pay it how's the how's that does she talk to you james does she feel bad about it not at all i think the relationship is strained there so um at no point there's no text messages aren't returned calls aren't returned oh wow okay so she went dark yeah i'm sorry truthfully even if she wanted to pay it she doesn't have anything left they took all the property yep she's she's working in a coffee shop i mean you're not getting 300 grand out of this check not at all that's why i want to hurry up and just get it out of the way and pay you need to pay your debt you're 300 grand you've already paid 600 of your 900 and now you got 300 left to go another example of co-signing don't well put your name worse loaning money to relatives only thing worse than loaning money to relatives is loaning money to relatives that you borrowed to loan i know but it's that same idea that i'm having to step in the middle oh yeah of your debt situation a co-signer taking out a loan on behalf of someone else yeah um yeah not great yeah so i'm sorry james yeah it's awful and then it destroys the relationship i think you're gonna be i think you're gonna end up with uh the property that you have now that's debt free plus some portion of those 15 and he's got five sold off or paid off five properties paid off i think you could clear it all yeah i don't know what the equities are in them yeah but you start running the math out on that it's a neat math riddle to run hey this is dr john deloney i take my sleep seriously because better sleep means better health and if you've been losing sleep for a long time you're gonna lose a lot of weight sleep or waking up sore because you've got some old thin gross mattress that wasn't designed with you in mind it's time to make a change i love helix mattresses they make mattresses for real individual people whether you're a side sleeper a back sleeper whether you sleep hot or if you and your partner have completely different sleep styles helix has a mattress designed just for you i want you to get online and take the helix sleep quiz it takes like two minutes and they're going to match you with a perfect mattress that fits how you actually sleep helix is not just a show sponsor for me i sleep on a helix mattress helix mattresses are the best the best savings of the season are happening right now on helix mattresses go to helix sleep.com slash ramsey and save up to 30 off mattresses with their helix labor day offer that's 30 off exclusively at helix sleep.com slash ramsey with helix better sleep starts right now lauren is in houston texas hi lauren how are you how are you better than i deserve what's up so i was wondering if it's worth living almost paycheck to paycheck and staying where we are to work for getting to like owning our family's business or should my i don't know i don't know i don't know i don't know i don't husband change his job into something that we can live a little bit more comfortably. Okay. The business cannot afford to pay him what he is worth? Not at this moment due to how his father and his mother are spending the profit. Okay. That's not the answer. The answer is the business can afford to pay him a proper amount because it would just simply make less profit. So, for instance, what does your husband do at this company? It's a telecommunication company. He's a lead technician. Okay. What does a lead technician make in the marketplace in Houston? I think, honestly, it's around $32 an hour. Yeah. That sounds about right to me. What's he making now? Half that, $16. Okay. Oh, my. So, here's the rule, okay? Then, if he leaves and they want a technician, they're going to have to pay $32 an hour because they're not going to be able to hire someone to do this job for $16. Right. Yeah. And so, what we teach people in entree leadership with family business is you pay the family member market risk. Right. And so, they're going to have to pay $16 an hour. Right. For the position. And we discuss future ownership, not instead of future ownership, so I can go on a cruise and you guys are starving. All the employees, the most one employee is making is $19 an hour. Okay. So, they're underpaying everybody. Well, no, no, they're not or everybody would have left. So, something's wrong with your numbers. It's because they've got people with. I guess, history behind them that makes it very hard for them to find other jobs as in like a criminal background. Oh, okay. Okay. So, they're kind of grandfathered. If you leave, you won't find anything else. So, you're staying situation. Mm-hmm. Okay. So, more out of desperation, these people are staying. Yes. That's kind of what you're saying. And I'm there helping in the office. I mean, I'm basically. I'm taking over the office. I'm getting $15 an hour. So, that's what he's making. Plus, I've got child care. I've got an infant on my hands. Okay. What does your husband say about all this? Is he dissatisfied like you are? No. Yes, but we like where we're getting it to be. I guess, getting the business to be for it to be in our hands. So, he's willing to put up with it in order to own the business? He is, yes. And when are you supposed to own it? When are you supposed to own the business to offset the fact that you're being paid half of what you're worth? By the end of next year. Oh. Okay. So, not five years. So, what kind of profit does the business make? We can take home anywhere between $40,000 to $60,000 a month. Okay. And you won't trade that for $16 an hour for a year? I guess my issue is we're kind of slowly getting behind on our bill situation. And my in-laws are. We're refinancing everything so they have better cash flow because they are racking up a bunch of credit cards and things like that so that they don't have to take it out of their own bank because COVID hit them hard. And they've got so many loans they're trying to catch up. And they're just not, I guess, doing it right. How are they going to give you this business? It sounds like it's all in pieces. That's why I'm in the office putting everything together. I guess, getting the business together. It's a data telecommunication company. So, I mean, it is very needed, I guess, in this world. They have retirement, Lauren? They're making $40,000 or $50,000 a month. Yes. $600,000 a year. Yes. And why are they having to refinance anything? Why aren't they just paying it off? Because they've got $6,500, I guess, a month going towards a. There's a line of credit that is at 75% interest that I keep telling them to pay off. But they're like, well, what if this happens? And then they rack up another credit card. Or I guess they're very stubborn. And I'm slowly getting to them to be like, okay, no, you need to pay this off. Do they have retirement, Lauren? I'm scared in a year from now, they're not going to have the ability to walk away from $40,000 to $60,000 a month. No. But within the end of the year, how I'm getting things kind of refinanced, like lower interest rates, we are. Okay, let's stop. You're all over the place. All right. These numbers aren't adding up anymore. Okay. So here's the thing. If you could too, you and your husband can sit down and see a path to becoming the owner of a business that makes $40,000 a month net profit. And if we believe that the parents are going to be in a condition to hand us that in 18 months. Yes, I would sacrifice to get that. But everything you go back to sounds like you're bitter and mad towards them and you think they're stupid. And I really don't care about that in this conversation. The conversation is, is your husband underpaid? Yes, he's underpaid. But that's a great deal to trade $16 an hour for $40,000 a month profit a year from now or 18 months from now. That's a bargain. But I'm not sure that you believe that that's going to happen because I think. I think you think they've got so much debt and other things going on that they're never going to honor their word and walk off. That's what I think is really going on. You don't think this is going to happen. Is that true, Lauren? Yeah, that is. pretty it sounds true to me yeah yeah you're throwing so many darts in these balloons that there's not anything here for the clown i mean it's just there's nothing left so you know you've got to sit down with them and figure out where we're going next and how we're going to get there and you've got so if i'm going to stay i've got to see a path that is logical on how we're going to get there in 12 to 18 months and these people sound just wild if they can't help you with that path you should leave them and let them have this circus yes and it needs to be written out an agreement of what you all four are agreeing to like on paper this is very vague like i jumped in and helped for a little while now i'm running the whole stinking thing and they said they're going to give it to us but they've got a 75 interest line of credit what are they dealing with the mafia oh my god and so you know that and who wants to keep that around like it's a pet so this is so illogical there's so much crap going on in this conversation so yeah you've got to comb through all this stuff and go when we get the business here's what we're going to have to pay uh pay off because you won't have paid it off and here's how we're going to operate it but if you can trade 16 an hour for 40 000 a month in 18 months you should make that trade yeah but you've got to come to the place you live that's going to happen and like rachel said it's written down yeah and that they have the ability to hand you a business and they can go off in retirement i don't think they have money i think they're broke yeah the whole place is a lot more broke than everybody yes i'm like i don't think i'm not sure i believe the 40 000 a month thing anymore well she said i don't think you keep 75 interest around i mean you'd have to your parents would have to be cousins to want to keep 75 interest around if you're making 40 000 a month let's just keep that we might need it you know that's just ridiculously stupid so no i i don't believe there's something wrong in this and uh i think lauren is has figured out that there's something wrong with this story and it's not all adding up and and it doesn't add up that's what she's figured out and that this is a trap and and so you don't want to be in the business of rearranging the deck chairs on the titanic yes and if you have to be at a place in your life where you make 40 000 a month to keep keep payments afloat you're broke you're broke like that's not a profit yeah that's i mean you're a profit that's just you you're you don't have money at that you don't have 40 000 a month the bank does yes and we don't need that no no no no no no and i kind of think that's what's going on i think these people have leveraged this thing to its eyeballs so i can't tell because lauren doesn't really know but she smells a skunk and it's usually because there's one in the area so that's what you're looking for we got a lot of metaphors in that one call circuses clowns balloons good luck lauren you this show is sponsored by better help i know a lot of you out there are trying to keep it together all the time you show up to work you pay the bills you smile at the right times but then no one sees you snap at your spouse or lie awake all night running through everything you'd wish you'd done differently during the day just because you're functioning doesn't mean you're okay talking to someone else is a great way to process what's happening in your life and get to the root of your challenges that's where better help comes in better help matches you with one of their 30 000 licensed therapists someone you can be real with and finally put down some of the weight you've been carrying and come up with a plan for getting well they can help you get perspective and see the other side of your situation and help you with a plan for moving forward better help therapists all follow a strict code of ethics and if the first therapist isn't the right fit you can switch for no extra cost asking for help before you hit a wall isn't weakness it's wisdom and strength if you're exhausted from always having to hold everything together trust a therapist and you'll be fine trust a better help therapist to help you carry the load go to betterhelp.com slash ramsey for 10 off that's better help h-e-l-p dot com slash ramsey we coach about 10 000 small businesses nationwide through our entree leadership brand we have executive coaching and we have executive coaching and we have executive coaching and we have executive coaches we have an online app that coaches them the entree leadership podcast is built on helping small businesses navigate a lot of them are family-owned businesses i just spent the weekend with 34 businesses that were averaging about 20 25 million dollars each annually and in coaching them over the long weekend and last weekend that's where i was and um so and we talked to them a lot last weekend and every time we're with them about succession planning about handing to the next generation um or selling or whatever it is you're going to do so a couple of rules a couple of principles you can go by in family business your family business is going to be no more functional than your family if your family is cray-cray expect the business to be cray-cray if your mother-in-law is operating in the business and she's nutty expect her to be nutty when she's at the office people don't suddenly become smart well regulated relationally brilliant when they walk through the doors of a business when at home they're absolutely can't find their way through a kindergarten okay and so you're not going to have crazy people that operate a business well together and that is where family business gets a bad name don't ever go to work for family it's because your family was crazy that's why you say that and so no but we work with family every day and we love it and we have some fun we argue about things all that kind of stuff we have conflict like anybody else but we have conflict resolution skills too hello and um we know how to lay out a plan and execute the plan and be in alignment and everybody be in agreement this is what this looks like and we're going to do it so if you're going to enter into a situation like our last call our last call we're going to do it and we're going to do it and we're going to do it and the thing that she and her husband did wrong they were just like the convicts that mother-in-law hired they didn't have any place else to go so they took a sixteen dollar an hour position that should be paid 32 and agreed to it and then later whined about it so you need to enter into that whole thing and say okay the only reason i would take this is because i'm going to get take the business over now what does that look like and comb through the exact details you can't vaguely promise off in the distance something that no one believes because they leave and that includes your own children and especially in that situation expecting to take over the company in 18 months like yeah that's i mean it's a fast period of time for all this fascinating that the daughter-in-law who's running operations calling here is like how how do you get the other people to work for 19 oh they hire convicts who can't get a job anywhere else i mean that she just dropped that and kept driving i mean that's a mic drop and just it's a very nice thing to do to get people back yeah it's really sweet but i'm like taking advantage of the situation and now your husband's in the same category yes only he's not a convict at least as far as we know well taking advantage of people is what it feels like it's what it sounded like that's the way she counts that's what she believes yeah and so this is who you want to work for i don't think so so you need real clarity you need to have exactly what the plan is and so forth and a good rule of thumb folks if you own a business and you want people in the family involved is to pay them what the marketplace demands and so if you have a son going to work for you and he's going to be a software engineer you pay what software engineers make not more not less and and then you say as you grow in your leadership skills we can talk about you taking over this business someday but today you're a software engineer today you're a what what would she a tech he was a tech and so that guy you know her husband so today you're a tech and you make 32 because that's what that's what the marketplace demands if we weren't hiring convicts and so um that that's you know that's fair and and if you're going to go in and take the operational position it's not a 15 an hour job the coo of a company that makes 500 000 a year profit does not make 15 that's asinine so no we're not going to do that we're going to figure out what this position is worth you're going to pay me that amount and the only reason we're taking these two positions instead of working somewhere else is because we have a two-year plan for this to be handed off to us and these six debts that are laying here will be paid off by that time out of the profits so that you don't hand us a pig and a poke and so you're going to have to you have to lay this out and have a dadgum clarity but it's this vague throwing grenades over the fence and wondering what blows up stuff that's got to stop which is like into me it's your fault too for taking the deal and it's a and this is a big deal from 16 an hour to 40 to 60 000 a month i'm like this is the biggest jump ever and the fact that you're not it's not so buttoned up yeah worries me right like that's it's that well i mean she's pretty sure it's not gonna happen because she thinks they're sure that they've got so many other things going on that nobody knows about and 75 interest i mean all these things so back to that but anyway so the point being for lauren and for anyone else entering these things is you i would say market value is fair to be paid and it's what we pay at ramsey for our for everyone and that includes rachel and that includes her brother and that includes you know these people get paid rachel gets paid on the same schedule that deloney and george gets paid on you same schedule same percentage of speaking fees and books and everything okay all that so um no change there at all then as you become an owner you can participate in the profits in addition to you being paid for your position and that's a proper way to do this and then lots of communication and lots of clarity where there's not lots of clarity and lots of communication and people aren't relationally functional you're not going to have a complete succession plan it's not going to work and so i don't think that one's going to complete because of all the things all the stink that lauren smelled but also lauren and her husband entered into this improperly it's on them too yeah that they took the position they shouldn't have taken these positions you should have said you should have demanded up front the way we come in here is where we see a clear path to ownership in 18 months and an ownership of something we actually want to own okay so we're going to clean up whatever mess is doing here during the 18 months you're going to pay me accurately for being the coo you're going to pay him accurately for being a tech during that time and if you can't do all of those things and showing including a clear path then we're not going to come over here and that's the thing that should have been decided up front but now you're in and and now the thing's going down the toilet and you're riding the you get to go on the ride jonathan is with us jonathan is in harrisburg pennsylvania hi jonathan how are you hi i'm good thanks for taking my call sure what's up um so we made our last mortgage payment yesterday um instead of in 2051 as the bank thought we were going to wow jonathan congratulations way to go that's amazing so yeah it your your content really motivated us to uh you know put some pep in our step there um so i like things that we've done in the last couple of years so i think it's going to be a great opportunity for us to do a little bit more of that and i think it's going to be a great opportunity for us to do some of the things that we've done in the last couple of years i think it's going to be a great opportunity for us to do some of the things that we've done in the last couple of years we're going to do some of the things that we've done in the last couple of years i think it's going to be a great opportunity for us to do some of the things that we've done in the last couple of years um we have a fund separate from everything else that's just for toys right now it's got about 45 000 in it um but my wife and i are not especially high earners so if i upgrade my uh net worth right now is 715 okay all right so i'm not working on buying a new thing but i'm just just just you know a random toy they come they go there's like a lot of different experiences but if if i upgraded my daily i could barely touch the 45 and if i used the whole 45 we'd be already above 50 so does that rule apply in baby step seven or what uh advice would you give for me the rule is based on the principle that the more you have tied up in things going down in value the harder it is to build a wealth yeah so fix that don't put so much in things going down in value that you go backward you've gone forward beautifully don't stop going forward right so there's no magic to the 50 in your situation i don't care but just don't put so much stuff and stuff money and stuff with wheels and motors that you go the other way because you got confused about where this wealth came from when it comes to your health insurance one of the biggest mistakes you can make is believing you're stuck in a one-size-fits-all plan that costs too much and covers too little that's why i'm here today and i'm going to talk to you about one of the biggest mistakes you can i recommend health trust financial they're the only ramsey trusted health insurance partner because their advisors take the time to understand your situation and help you explore the coverage options that are available to you whether you've changed jobs welcomed a new baby or had some other life event health trust financial shops multiple top-rated insurance carriers for you then they help you understand your options so you can make a smart decision instead of guessing i've recommended health trust financial for more than 20 years because they work for you not the insurance companies so they offer unbiased advice visit health trust financial.com to connect with an advisor today that's health trust financial.com today's question of the day is brought to you by why refi if you've fallen behind on your private student loans you don't need more shame you need a plan why refi helps borrowers explore refinancing options with low fixed rate and payments based on what you can afford go to y refi.com slash ramsey might not be in all states today's question comes from matthew in michigan i have a car worth twenty thousand dollars that need that's in need of a five thousand dollar repair to replace the head gasket is there a rule of thumb to determine if a repair expense is too much to pay percentage wise for a given a given car's value well yeah it usually doesn't come with a car this expensive though yeah so the the thing that we've always taught here on the air is let's take say you got a five thousand dollar car and you blow a head gasket and you need to spend three thousand dollars not five to put a head gasket on and uh so i'm gonna spend am i gonna spend three thousand dollars on a five thousand dollar car here's the formula what can you sell the car for as is with the blown head gasket in the case of the five thousand dollar car blown head gasket you might get two you might get three let's say you could get 3 000 for it if the value that you can do the repair is more than the value after the repair you don't do the repair so let me recap if it's a five thousand dollar car after it's repaired and you can sell it for three and the repair is three that would be six thousand you would not repair that car you would take the three from selling it put the three you were getting ready to spend on it and buy a six thousand dollar car instead of a five thousand dollar car that you have after you're finished with this that's how you do the formula now matthew i do not know what your car is um and i have i and i'm an old redneck that used to put my own head gaskets on and replace my own motors in cars back when i knew what the car was when i open a hood now it might as well be a spaceship i have no idea what's in there now so um i don't know what i'm talking about but five thousand dollars sounds awfully high for a head gasket on a twenty thousand dollar car i am going to shop that um good rule of thumb folks is uh uh car dealers are the most expensive shop by in most cases as much as double so finding a local independently owned shop like christian brothers is one that we endorse i know a bunch of those guys it's a independently owned shops in your market and someone like that they and they're honest they do a good job you go in there and find an honest good local mechanic and let them give you a bid for a head gasket but it's i'm a little i don't know what the engine is i don't know what the car is there may be a complication with that sure but for twenty thousand dollars i probably am fixing it i'm fixing it yeah you're fixing it and i'm probably fixing it for three and i'm gonna fix it yep that's what i'd say that that's where i would go to all right jen is in detroit hi jen how are you taking my call today certainly how can we help so i'm calling because um i'm 46 years old i'm single i've never been married um all my life i've always wanted to get married but i haven't found anyone yet and i've been holding off on buying a home because i've always had this dream of buying my first home with my future spouse um and as i've gotten a little bit older um i'm starting to wonder if i need to rethink that plan um i did want to mention also that this is thinking about for the future because i i can't really do anything at this moment because i am currently laid off um but i'm hopeful that i'm going to get a new job um very soon and i'll be back to normal making money again and back in my, and I can move forward with some of my goals that I've got here. So I've had a lot of time to think in the last eight months that I haven't been working. Has it been eight months since you haven't had a job? Wow. Yeah. I was laid off in December of 25. How are you living? How are you paying bills? So I was able to live off of unemployment for the first six or seven months. And then I was also given a pretty generous severance package. So once my unemployment ran out in July, I've been starting to chip away from my severance package. So I've been very thrifty. You need to land something, don't you? Do you have any debt, Jen? I do not. No, not anymore. Yes. Good for you. Any savings? Yes. Yes. I have savings. I have a total of 394K in retirement between a traditional and Roth IRA. Good for you. And I have, thank you. And I have 30,000 in my savings. I have a total of 30,000 in my savings. I have 31K in a non-retirement mutual funds. And then I have in my high-yield savings, I have 32K, which is basically my severance money. And that's what I've been living off of. And then my last job, my income was 114K. And I'm hoping that my next job is going to be something similar to put me in a good position again. Yeah, for sure. It's great. Should she wait to get married to buy a house? No. Well, I was going to answer her question. Yeah, no. No, Jen. I think because I just checked off the boxes, you're debt-free. You have savings in the bank. And then you have and as long as you have a good down payment, I would move forward for sure. Because owning your home is going to give you a level of stability. And it's going to continue to add to your net worth and your wealth building process. And here's the thing, too. It's just a house that if you meet a guy and in two or three years, you're like, okay, things are moving. And we got to sell a move. That's great. It's just a house. You can do that. But no, I would not wait. You don't have to keep a house forever. Yeah. So if you meet somebody to Rachel's point, and this house doesn't fit into the new plan, sell it and then live the part of your dream where we buy something together. Okay. Yeah, you're too successful, Jen. You got it. Like getting in the market now. And seriously, and being a homeowner, women are now outpacing single women are now outpacing single men in homeownership. Oh, really? Yeah, almost double. Yep. You're kidding. Oh, that's I did not know that. Yeah. So single women are buying homes, making a life for themselves. And again, I pray that your prayer, you know, comes true and that you do find someone and meet someone and that's the case, then great. You can sell, he can move into your place, you know, whatever it looks like for you guys. But it's not a, it's like you have to be married to this to this house. No pun intended. Charisma is in Sacramento. Hi, Charisma. How are you? Hi, I'm good. How are you? Better than I deserve. What's up? Charisma is calling. I'm working the baby steps. I'm on almost the end of baby step two. I do know that I have to save, you know, my emergency fund still. But I know that a house like saving for a house is baby step three B. And I have been, I guess planning ahead trying to figure out how I would do that. I'm a single mom of two on a $50,000 income. And houses in my area, I'm a single mom of two on a $50,000 income. And I'm a single mom of two on a $50,000 area, like rundown houses that have been gutted out are at the minimum like $300,000. They are, you're right. They're extremely expensive. I'm on a low income. I mean, I know that I could change my income, but as of right now, I'm working for my dad at a family-owned business. So I'm hoping to possibly stay, but I know that that's probably not the best financially for me. Could you make more somewhere else? I don't really have any degrees or anything in my name. But what are you doing now for work? Works for a day. I'm the office manager. What kind of work is it though? I do everything in the office. I'm the only office person. So I do payroll. I answer the phones. I schedule appointments. It's a plumbing company. If you went to work somewhere else, what could you make? Being an admin, being in that kind of role. Honestly, probably the same. I have a degree. Okay. All right. So you're not really taking a pay cut working for your dad, which is kind of what you indicated at first. Okay. I could make more if I didn't work here, you said, and that's not true? I mean, I do have 12 years of experience. Is it true or not? Probably not. Okay. All right. I don't care. It doesn't matter to me. Either one's fine. So we're dealing with a $50,000 income in Sacramento. You're probably not buying a home. It's a very difficult, very expensive real estate market. Yep. So between that Baby Step 3B, Charisma, and Baby Step 4, we say there's not a hard and fast rule, but it's kind of that feeling if you know it's going to take longer than probably three-ish years to save up that down payment, you need to start doing both. So be putting some money in retirement while you're saving for that down payment. So in order to be a homeowner, you have two choices. Do something to get your income up permanently, or. Go to an area that you can afford to live on what you make. You cannot buy a home in that area. It can be very difficult with the numbers you gave me. I don't disagree with you. Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Taylor is here with me. He's in Reno, Nevada. Hey, Taylor, what's up in your world? How's it going, Dave? How can I help? Well, I got a question for you that I have a feeling I know the answer to. But like a regular one, I think I need to hear it from an authoritative figure. We'll see if we can find one for you. My wife has been wanting to do more traveling, more fun things. I run a mobile sound system. So I work a lot on the weekends. So the weekends we do have off, we tend to not go anywhere. Outside of that, I just have a problem spending money unless it's on something that I can use to make money. Does that make sense? Yeah. So no fun for you, Taylor. I'm just kidding. Basically, basically. My work is fun, so that's good. But outside of that, I mean, we spent $300 on food at a festival this weekend. And that hurt. Yeah. You're still recovering. Yeah. Emotionally, yeah. So what is your household income, Taylor? It's going to fluctuate about 70 to 100. Okay. Depending on how good you might get. How much debt do you guys have? Do you have money? I mean. The house is the only thing we have money on. Her car and my two trucks are paid for. My sound system is paid for. So that's the. The tear I have is we want to go do things, but I want to take that money and put it on the mortgage. Mm-hmm. I've been upping the mortgage. From what it is, I'm on track to be at least double the mortgage by the end of the year. Mm-hmm. That's good. So what timeline will you have it paid off by? That I haven't calculated because it hasn't been consistent enough. I started this household venture this year. Okay. Prior to it was all the trucks and the trailers. Yeah. And now I'm just having investments and saving. Savings, we have a fully funded 10K emergency fund. It's just the two of us. There's no kids. Mm-hmm. My 401Ks are split since I separated from the Navy. I have about 80 grand in a government TSP. And then I started my own personal Roth 401K after I separated. This got about 20 in it. It gets about 700 a month. Okay. And then we've done her 401K. I've been in it for a couple of years. I've been in it for a couple of pay up with her work to probably more than it should be um but she's doing about 900 a month plus the company match okay well i would so those she's she's sitting about 40 in that one okay gotcha um so we're away another 500 into mutual funds and that sits at about 72 okay yeah well you guys are doing a great job um my question would be are you on a pretty detailed budget month to month looking at your income and where it's going uh for the most part i got a i got a pretty pretty good grasp on it uh that's not what you're not doing what she said within 20 you're not doing what she said she said a detailed budget not i got a grasp on it now i mean every dollar has an assignment in the every dollar app and you and your wife are living with it and you're living with it and you're living with it and you're living with looking at that where every dollar is going together and you're agreeing on it you are not doing that no okay so i think that's going to be your your relief taylor honestly because i think when you guys see where your money's going and what you have to spend then when you actually give it permission to say yeah at the beginning of the month we're going to have a category for fun and there's going to be 800 bucks or whatever you are able to put in there and want to put in that number and then you can freely go and spend it as you want or a vacation right we want to save for this vacation so we're going to put x amount away and so i think the lack of detail could be stressing you out just thinking okay is this okay to do is it not okay to do i would rather it be here for something that makes money right like but when you force yourself to spend as you should you should be giving saving and spending where you guys are so that spending element needs to be in the budget and you guys need to agree on the amount it doesn't have to be ridiculous here's the here's what you'll experience okay when the two of you write it down and you say okay this month we're going to agree that the fun category has i'll just make up a number 700 bucks in it okay and you put 700 bucks in that category what you're going to experience is is that it's as if for you that it already got spent right then so when you turn around and actually do spend it you're probably going to actually enjoy it but the angst over spending money or wasting money on fun when i could be buying more equipment happens when you write it down even though it hasn't left and so you're going to have that emotion out of the way and you're actually going to be more fun you're going it's going to be more fun for you more fun for her and you do need to budget something but if you both agree to the number and this month it's a little low because i need to buy this piece of equipment this month i'm good so it's a little higher uh because we don't we're not buying anything this month and so you know and you go back and forth like that you need to have that in there and that way she will agree to you continuing to grow this business without resenting your business but if all of her fun is involved in you buying a piece of equipment she's not going to enjoy this for very much longer and right after she quits enjoying it you're going to quit enjoying it that's the way that's going to work so we need we need to get a plan that we can both ride this together and and both stick to it emma is in spokane hi emma how are you hi dave i'm good how are you better than i deserve how can we help um i had a quick question about some debt that i owe that doesn't accrue any interest um so right now i owe about 9 000 on a car and i owe i believe the total is around 52 000 on student loans that i had taken out and i was having a difficult time because i was using you know a really intense debt payoff and i had paid 36 000 off in a year and a half wow on my student loans and i was working really hard on it but i went and visited a family member who is kind of well off and they they saw how hard i was working on it and they saw how much it was kind of taken out of me and taken out of my life so they decided to to buy all that debt for me that way i can pay it back to them without worrying about all the interest that i'm accruing oh the problem is that um it's a pretty large monthly payment and right now is that deal already been done has that deal already been done yes oh crap okay so how much how much do you owe your family member that was trying to be a blessing um i think if i i don't have the exact total like on hand right now but i think it's sixty two thousand dollars is the rough estimate and what do you make um last year i'm a nurse so i i make a good amount i made like i think brought home seventy six thousand dollars last year and you have the opportunity for all kinds of overtime and you paid off thirty six thousand dollars earlier in what period of time a year and a half okay so if you use that formula it's going to take you three years to clean out the family member okay i wish you hadn't done that but um i'm gonna lean into it just as hard because you want this out of your life as soon as possible interest was not your problem and i wish you hadn't done this and i wish you hadn't done this dave ramsey here for more than thirty years i've been talking to folks on the air and i can tell you that most people are broke not because they don't make enough money but because they don't have a plan you need to give every dollar you earn a job because when you do that something changes you stop guessing you stop worrying you stop stressing our every dollar budgeting app will show you how to find extra cash pay off debt and finally start winning with money but most people won't do it they'll keep living paycheck to paycheck keep hoping things will change without making a change it's time to say enough is enough it's time to take control of your money it's time to start your every dollar budget for free today go download it in the app store or google play ramsey is taking over an entire cruise ship our second ramsey cruise twenty five hundred people all ramsey people will be on there we're gonna talk about having celebrating our self talk we're gonna celebrate with them them having beat debt and change their family tree we're gonna do the world's largest debt-free scream all together on the show we're gonna do the world's largest debt-free scream all together on the show we're gonna do the world's largest debt-free scream all together on the show out today and a 15-year fixed at about 5.5%. five and three quarters percent right now. 5.98. Okay. And if it, let's see here. Anyway. Six percent, yeah. If the rates go down, you can refinance. Daniel is in Washington, D.C. Hey, Daniel, how are you? I'm doing well. How are you, Dave? What's up? All right. I got a bit of a family will issue that I want to get your advice on. So my mother's parents have passed away. My grandfather was lost to go. That happened earlier this year. The will they left behind took their inheritance and one third went to my aunt, one third went to my uncle. And for my mom's third, they cut it in half and distributed it between me and my two siblings. Now, the reason for this, is my mom and my grandmother never had a good relationship. For whatever reason, my grandmother just never thought my mom stacked up and she let her know it every chance that she could. And so it's very sad. And what's unfortunate is after my grandfather had passed away, you could tell that she had started to mend some of those feelings, was looking back with kind of a positive outlook. And so I think that's a good thing. I think that's a good thing. I think that's a good look. And then all of a sudden, this will shows up and it's one final slap in the face that, you know, the things were just not good. When I learned about this now, and for the record, I don't know the exact amount, but I would assume that my third of her half, if we're tracking here, it's actually your third of your third. Yeah. Yeah. Well, it's probably around 30 to $50,000, something in there. If I, if I had to guess now, as soon as I heard about this, my instant reaction was very firm and it, it hasn't changed in the month following, which is, I don't want anything to do with this. I will accept the money because I have to legally, but morally, I do not want to be a part of whatever my grandmother was trying to accomplish when they wrote this will. Um, and I just, I don't want anything to do with it. I consider, it, um, to be my mother's inheritance and, and that's who it should have went to. And, and I don't want to be part of it. Now I have not discussed this, um, with my other two siblings. Um, I, uh, so I'm not sure how this is going to play out, but I just kind of wanted to hear your perspective on this situation as far as how you would handle it, how, um, and just generally how you see things. Wow. You feel pretty resolute, Daniel. So I would, I, my knee jerk is, is say, follow your gut. If it feels like dirty money to you, you don't like it. You don't like the spirit around it. You don't want anything to do with it. I think that you, I think you trust your instincts for you. And then to know that your siblings may not have that same conviction either. Right. So, so, and if you're free of that, which you should be right, that they can do what they want, they get to do what they want to do and you get to do what you want to do. But I probably, your grandmother gets to do what she wants to do. It's her money. She left it where but you're looking at it going, I don't want it. That's your decision. Yep. And I think I would let my siblings know just an FYI. It's like a no pressure thing, but I'm not asking you to do this and I'm not judging you if you don't, but I don't want anything to do with this. It smells. Yep. Gotcha. I think your mom will accept it, Daniel. Will she take it? Um, obviously her initial reaction was as, you know, absolutely not. No, you know, that, you know, Oh, you've talked to her about it. Yeah. Well, I mean, I was, I was staring her right in the eyes when she told me and I could see the heartbreak in her eyes. It was, it was gut wrenching to see. Um, and, and I just, and of course, you know, she said, no, absolutely not. Absolutely not. And I just put my phone down. I said, no, God has, you know, me and my siblings were all firmly middle-class. Um, we're all around, you know, each other in the same regard as far as like financially, I don't know all their details, but we're kind of in the same bucket. And well, the thing is, let me, let me do it. Let me do it. Let me do it. Let me do it. And I just don't feel the need to take it. Yeah, that's fine. Uh, you need to seek a tax consultant cause you can only give $19,000 to another individual in a calendar year. Are you married? Yeah. Uh, I am. Okay. Your wife can give your mom the other back. You give her 19. Your wife can give her the other two checks. Okay. That's how you're going to execute this. What I don't want you to think is going to happen is this is going to make your mom's heart not be broken. Your mom's heart was broken by your grandmother, not by you. And you can't fix that. Money will not fix that. And this money will not fix that. It's your decision though. I don't want, this is weird. I don't like it. I don't want to be part of it. That's your call, but don't ask this transaction to do something. It doesn't have the power to do, which is heal your mom. Hey guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with ask Ramsey, ask your money question and get answers built on Ramsey principles. We use on the show, whether you're making a decision or just want something explained, ask Ramsey is here to help. It's fast, simple, and easy. And if you're interested in learning more about Ramsey, and free to use, go to ramseysolutions.com and try ask Ramsey today. That's ramseysolutions.com. Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to stuff. Ramsey trusted insurance pros are vetted and coached to make sure they're market experts who have your best interests at heart. Go to ramseysolutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Josh and Aaron are with us on the debt free stage right here in the lobby of Ramsey solutions. Hey guys, how are you? Good. Welcome. Welcome. Where do you guys live? North Vancouver. Canada. Oh, wow. Nice trip to Nashville, huh? Yes, it is. Wow. Well, welcome. Good to have you. And how much debt have you two paid off? $93,451.06. Way to go. How long did that take? 25 months. Good. Good for you. And your range of income during that two years? We started at 73,000 and we're at about 120,000. Excellent. What do you guys do for a living? I am a Baptist pastor. Awesome. Very nice. So great. You guys, what was the 93,000? It was three personal loans, two credit cards and a family loan. Wow. All of it. Just the normal stuff. Normal stuff. So what happened two years ago that made you go enough already and do all this Ramsey stuff thing? So our daughter took Rachel's high school class actually. Oh yeah. In her school. And she kept coming home and going, Rachel says we need to do this. Rachel says to do that. I'm such an influencer. Not Dave says, Rachel says. He started looking into the Ramsey and then he got hooked. I was, I liked Dave's direct approach. I guess that's the pastor in me. And I started listening to the podcast and read the book in one sitting. And I did what you're not supposed to do. I went to my wife and I said, we're doing this. I don't care. And you know, we're going to start tomorrow. And she was not as on board with that right away. Uh, but we started listening to the podcast and the reason she got on board was actually the debt-free screams. Oh, so you heard it and something, what happened inside you that made you think like, Oh, that is inspiring. I guess it gave me hope that, um, if others could do it, then sure we could do it too. Yeah. Cause you felt like 93,000 was just too much. You didn't think it was possible. It was the one area in our marriage that we struggled having conversations about because. I wanted to talk about it. She just didn't want to pretend it wasn't there and, uh, it just, you know, I just got sick of living paycheck to paycheck being stressed out and, uh, she was feeling it as well. And so that's why we started the journey. Amazing you guys. Okay. So marriage before a little chaotic around the subject, some avoidance, you know, some fighting probably. What is it like now after you walk through two years of this journey together? It's probably one of our favorite topics. Yeah. Yeah. We love our, our monthly meetings. We like, we look forward to it and yeah. And finances is totally different. Doing the every dollar budget. Um, that app just helped us so much. And you know, once we started doing that, you know, it wasn't like it set us free. We were able to do what we needed to do. She was able to buy what she needed to buy and keep everything, you know, going in the right direction. So that's amazing. You guys, well, you still moved the needle at 40 - $45,000 a year. - That's a lot. - Yes, yeah. $4,000 a month for two years. That's your average. That's pretty crazy. He has a video game collection. So we sold a lot of that. Oh, yeah. He used to have. Yeah, that's true. Used to have, yes. And also, he started selling it on eBay. And I was like, hey, that's pretty easy. So I started to take over that. I know absolutely nothing about video games, but I like selling them. So I'll go thrifting. I like selling him some video games. Yes. So we do a lot of thrifting, and he's very good at fixing things. So he'll clean them up, fix them, and then I'll sell them. Good for you guys. You had kind of a side thing happen to bring in some extra income, too. Yes. Good for you guys. Okay, what was the hardest part, though? For two years, that's a lot of work, a lot of cutting out things in the budget, all of it. What was the hardest part? Just saying no to things that we used to say yes to. Yes. Especially with the kids. Yes. We didn't eat out. We didn't go on any vacations. We just lived on as little as we could possibly live, and we sold everything we could possibly sell. So that was hard. Was it worth it? Oh, yes. 100%. Yes. Yeah. 100%. Talk to somebody who's out there listening or watching that is going, I don't know if I want to miss out on eating out for two years. I don't know if I want to miss out on dot, dot, dot. I would just say it's worth the sacrifice. The freedom, the peace that we have now compared to before we started, it doesn't even compare. And we just have so much more financial freedom. And you should just do. Start now, one day at a time, and it'll change your life. And this has changed our lives. So how many years have you all been married? Almost 20. Almost 20. Oh, wow. So you guys changed a whole. A whole 20 years of marriage. A shift of 18. Yes. Yes. Probably the biggest change in our lives. Wow. Yeah. Does the freedom feel as great as you expected or even better? Much better, actually. I think better. Yeah. Yeah. Yeah. Once we made that last payment, it was like, okay, what do we do now? Totally. Yes. Yes. And so we're looking forward to the future. We want to pay off our home and keep moving forward in that direction. And we just know it's possible. So we know we're going to keep going on it. We're different people than we were before we started. So good. You know, I think that's such a good point, though, the sense that I think so many people live with debt and it's so normal, but they don't even realize the weight that they carry. Yes. And even though you all recognize it because you're like, we don't want it anymore. Still, even after that final step, after that final payment, you're like, that was even it's even better than what I expected. It's like you don't even realize how much stress you're carrying when you're carrying that debt until it's gone. You're like, wow. Oh, so good. In your 20 years of marriage, have you ever been debt free? I guess when we first got married the first couple of years. But then I made some dumb decisions. I was actually investing and doing good things. And I took out our money and bought a car, you know, all the all the wrong things. You started out debt free and then you became normal. Yeah. Yeah. And you have four beautiful kids over there. I can see them. What was that like for them on the exam? You said you had to cut out. You had to cut out some things because of them. But what was what was it like having four kids in the house and doing this? They were actually on board. They were very gracious with us whenever we would explain, sorry, it's not in the budget this month. They were really good about it. Yeah. They jumped on board and just did it with us. And I would say that they don't want to see a box of Kraft dinner for a long time, which is our American mac and cheese. So they're like, no more, please. Like, we're done. We're so sick of it. Yes. Oh, that's amazing. Incredible. You guys. I mean, that's that's a feat of what you all just did. Yeah. You changed your family tree because they watched their mom and dad become heroes. Thank you. And they'll never be the same because they, you know, more is caught than taught. They're going to do what you do, not what you say. And so they watched you change your whole family tree using these spiritual principles from the Bible you preach from every Sunday. Yes. And congratulations. We're very proud of you guys. Thank you. Very, very, very well done. All right. Bring the kiddos up and introduce them and give us their ages. All right. We have Callie. She's our oldest. She's 17. Elena's 14. And then we have Raylene's 12. And then my youngest son, Lance's 10. Lance, you're holding up all the all the girls. And Callie, you're the one that brought Rachel home and started the whole thing, right? Hey, girl. OK, there we go. There we go. I love it. Rachel says, Rachel says, Rachel says, I know you're probably five months into that mac and cheese. And you're like, Dad, come on. Why did I do this? Why did I do this? Why did I tell Mom and Dad about Rachel? Oh, my gosh. Hey, way to go, you guys. You're a model. You're absolutely beautiful. Congratulations. You transformed your life. All right. Josh and Aaron and the team, 93,000 paid off in 25 months, making 73 to 120. Count it down. Let's hear a debt-free scream. Are you ready? Three, two, one. We're debt-free! Yeah! Woo! Woo! Woo-hoo! That's how you do it, ladies and gentlemen. Love it. Love it. All right. Let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted agents aren't just experts who guide you through buying or selling. They're people you can trust. can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at ramseysolutions.com slash agent. That's ramseysolutions.com slash agent. Our scripture of the day, Galatians 6.10. So then as we have opportunity, let us do good to everyone and especially to those who are of the household of faith. Warren Buffett says opportunities come infrequently. When it rains gold, put out the bucket, not the thimble. Emily is in Akron, Ohio. Hi, Emily. How are you? Hi, I'm doing all right. Cool. What's up? So about three years ago, my husband left his family. He started his own vending machine business. And since then, he's racked up about a million dollars in debt. He's run out of money to run the business. Personally, I don't feel like he's worked very hard to make it work. He's recently just went back to work to try and give us an income because mine's the only one. I just started a job also. So wait a minute. The vending machine business that he spent a million dollars on is not making money? Correct. Why? Correct. Well, I think he tried to buy too many. Too fast. And he followed the Robert Kiyosaki way and kept telling me, you got to get into debt to make money, which I strongly disagreed with. But he kind of just kept going anyway. So I guess at this point, I just don't know if I should, we should be pursuing bankruptcy. That's what he wants to do. Personally, I feel like the Bible's very clear on paying back our debt. But at the same time, the business was probably only worth $450,000. So that would leave us with about $500,000 of debt. Who is the millionaire? Who's the million dollars owed to? Some of it's business. A lot of it is personal credit cards, HELOCs. He took out a couple of mortgages on our house. We don't have any equity in our home anymore. A house? There's a rental house? We did have a rental house. We just sold one. We have another one, but it's not selling. That one's only worth about $60,000. So. How long has this been going on, Emily? Three years? A few years. Yeah. Okay. And you're done. I hear it in your voice. You're pretty pissed. I'm very done. Yeah. And you've had to go back to work. Do you guys have kids? We have four. How old are they? 13, 12, 10, and six. Oh, man. All right. Wow. I'm sorry. So there's nothing left to sell against the million that's still outstanding? He could try and sell some. He has some micro-markets and he has many machines, but what he would sell it for would be a huge loss. I mean, selling the business as a whole, the most would be like $450,000 to $500,000 is what he's being told. So then you'd have half a million to sell. And there's how much? Is there still a million owed? Right now, altogether, with all the debt, yeah, we owe just under a million dollars right now he hasn't sold it yet it's he has two people running it um but it's not making money he doesn't have enough money to like sell inventory um it's just okay so if he sold it for 450 what who would that pay off i guess it would depend on who we want to pay off it could so the vending machines don't have a lien against them the business doesn't have a lien against it well he he leases some of the micro markets and he uh rents to own some of the vending machines some of the vending machines he does own outright but most of it is in debt okay i'm trying to figure out what the 450 000 would be used to pay off would it go to helox or credit cards that clear well how much would that clear all of those rent to own machines and all that or does that actually get to clean up some of your house debt um he he wants to put any of it i didn't ask what he wanted i mean where there's is the money gonna be have to be used to clean up these machines in order for the thing to be marketable yes yes yeah so you're gonna have to have to put it towards the machine yeah so you've got 450 000 worth of debt on the machines that you would just use that money to clear that debt but so selling it doesn't really net you any cash to pay off like your credit cards or your house it just clears some of the debt that's on the machines correct and get you as more than 450 000 on the machines right yes okay and then then you have your house and you have credit cards and you have a heloc right and a sixty thousand dollar rental now you're right yes okay it's not being rented no it's vacant we were trying to sell it and it's just sitting there right now okay so um wow there's so much going on here um and you guys have no money emily right none in retirement or there's no cash he drained our 401k to do it and our personal credit did you know there's no money did you know this was going on or would he make decisions and tell you later uh we would agree on things and then he would go do whatever he wanted um eventually i kind of released it over to him and i found out because our credit card got declined and then i checked our bank account there's no money how much do you make at your day job uh right now i'm at 25 an hour working 30 hours and what does he make at his day job he just started last week and it's 21 an hour base and he's trying to sell uh insurance with all state okay all right um well if you were to file chapter 7 bankruptcy you would have to re-sign on all the debt that is on your home including any helocs or anything else that doesn't go away or you lose the home one of the two yeah how much is all that emily the heloc on the home uh it's all like four hundred and fifty thousand dollars and i think our home is probably worth a little under that oh so the bulk of that second part of the debt is the home wait wait a minute let me back up so if you sold your home and sold the business you would clear up nine hundred thousand of the million well our house no because we wouldn't we wouldn't i'm sorry so we owe about 450 000 on our house right now we bought it for one is that part of the million um no the heloc is which is like another 200 000 the personal like mortgage is probably 250 right now okay all right so it would clean up 200 000 of the million 450 would be cleaned up when he sells the business so that's 650 is cleared which would leave you about 350 000 and other debt if you sold your house and sold the business yeah credit card and business debt and the business debt when you say business debt what is that like business loans he's taken out okay well they're signed personally so they're not business loans they're just personal loans he used to buy vending machines with now if you sold the business for 450 are there any machines that are not included in that package no he would sell all of them that would be done okay okay so what i'm trying to do is work through if we if we cleaned house because in a chapter seven you're going to clean house anyway and then if the other the other 300 000 or whatever gets wiped out if he files bankruptcy so usually when i'm getting into these things bankruptcy doesn't do as much for you as you think it does because if you sold the business and sold the house we're not going to do as much for you as you think it does because if you sold the business got a lot left to do and that that can be negotiated that debt can be negotiated down for pennies on the dollar versus filing bankruptcy so it's possible mathematically legally you could probably work your way through this i don't know but i think you could okay just based on what i've heard i'm trying to get figured all out there's a lot of moving parts i gotta tell you i i'm about having been through this only i was 28 years old and i was the stupid husband okay i was him i didn't lie but i just did stupid stuff i just went deeply in debt and lost everything on real estate wasn't vending machines but same thing um and i'm more concerned about him being depressed or suicidal and i'm more concerned about your marriage than i am about any of this money and you're you're rightfully so very disgusted right now um but if i were gonna coach you guys i would be more concerned about your marriage than i am about any of this money i would coach him on throwing his shoulders back and building out chapter two of your all's life and i would coach you guys on sitting down with your pastor with a good marriage counselor and try to work your way through this where he repents of the stupidity and he begins a process to rebuild trust with his wife and relationship with his wife because you are very disgusted right now and you should be yeah you should be but money fights money problems take marriages number one reason for male suicide is financial issues so there's some there's big so i want to take care of you too yeah ninety percent of this discussion and ten percent bankruptcy or not who cares i try to sell everything and work my way through it that puts this hour of the ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace christ jesus