The Ramsey Show - App - Bankruptcy Won't Fix Your Problem With Debt (Hour 2)

Episode Date: January 29, 2019

The show about you

Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is donned, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. We're so glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Frank starts off this hour in Chicago. Hey, Frank, welcome to the Dave Ramsey Show. Hi, Dave. How are you? Thanks for taking my call. Sure. What's up?

So my wife and I are 45 years old. We've got nine-year-old twins. We're currently working on baby step two. I believe we'll be debt-free within a year. We're currently renting our home and just wondering, based on our age and stuff, if we should plan on buying a home again in the future, if that's something that we should start planning for, or if we should just continue to rent once we're debt-free based on our our age and situation why wouldn't you buy home I don't know I just you know we're we're 45 and we're not sure where we want to retire if we're gonna live in Chicago the rest of our lives you know we're 15 20 years out from from

retirement if we do buy we would want to buy probably on a 15-year mortgage with sizable down payment, of course. So just kind of planning and preparing for that. Well, I mean, if you were to look at real estate prices 10 years ago and real estate prices today, that would tell you you would wish you had owned a home during that time, by and large. And certainly 15 years ago and very certainly 20 years ago. And so were you to stay in Chicago for that period of time, you know, for the next five to 20 years, then you're going to make some money on the house,

and it's going to be worth having owned the house. Usually buying real estate on the short term can get you in trouble. I mean, if you're going to be there three years or something, but that's not the case. And then in retirement, owning your real estate, what that does is it locks in the most expensive cost you have, which is housing. It locks in the cost of it to own the house, even if it's on payments. Prefer, obviously, to be paid for when you get to retirement. No kidding. But even if you's on payments. Prefer, obviously, to be paid for when you get to retirement. No kidding. But even if you just have a house payment, and see, if you live to 65 years old, statistically,

you're probably going to live into your 90s. Average death age of a male is 74, but that includes infant mortality, teenage death, and so on. Statistically, if you're in good health at 65, you probably got another 25 years to outpace inflation. And guess what rent's going to do during that 25 years? It's going to go up every year. And so your most expensive cost is housing, and it goes up every year when you're a renter during retirement or any other time. So for now, being a renter, while you finish up getting out of debt, as you said, and get your emergency fund in place and save a good down payment

and then put it on a 15-year fixed is the proper steps to do. So for now, being a renter is the right thing. But as soon as you get through, you know, baby step three and you start saving baby step three, be saving for a house, I'm going to put you in a home as quick as I can. I believe in real estate. I think it's a great stabilizer for you. You should not buy it when you're broke.

It'll make you broker. It's not a salvation thing. It doesn't save you. It's like a bad marriage. Let's have kids. That'll make our marriage better. That's a dumb idea. And so, no, don't do that.

It doesn't save you, but it does add stability to your life and wealth to your life over the course of your life to be a homeowner if you do it in the right ways like you're talking about doing it. Elaine is with us in New Orleans. Hi, Elaine. Welcome to the Dave Ramsey Show. Hi, Dave.

I need your advice. Me and my husband, we're in like $400,000 worth of debt, and that does not include the home. He has a dump truck business, and $260,000 is secured part of that debt with truck loans and car loans, lease on the truck. And he's knocking that bankruptcy 13th door right now and I am desperately trying, I don't know what to do. We have a home, it's worth $320,000

we have about $100,000 equity in the home and he really blames me for being in this position because he said if I would have took out the equity in the home he wouldn't have gotten in all of this debt well that's asinine he got in all this debt because he signed up for all the debt

it isn't your fault that's ridiculous so uh and chapter 13 isn't gonna be your way you're you got too much debt for chapter 13. They're going to put you in a chapter 11. And the failure rate on chapter 11 is about 90%. Most people don't make it out of a 13. Most people don't make it out of an 11. It's about 70% in the 13s, meaning that the very things that cause you to get in the mess in the first place, people don't fix them. And bankruptcy usually doesn't fix this. And so if he sold off all of his trucks, could he be debt-free and break-even, or is he in the hole on all of them? He's in the hole because if he sold all of them,

that's his actual business is the dump truck business. How many dump trucks does he have? He has two. He's leasing one, and he has a loan on the other one. Yeah. And so he has a driver driving both of them, or he's driving one of them? He's driving one, and the driver driving the other one. Yeah.

So I'm getting rid of one for sure. But he's not making a profit with these things. That's what he's thinking about bankruptcy, right? Well, he made like $163 last year gross gross profit gross like 48 000 yeah and i make around 50 000 yeah yeah but so he's really lousy at business but he's good at driving a truck yes sir that's what we figured out i, he pretty much sucks at this business thing. If you bring in $183,000 and you had to go half a million dollars in debt to do it or $400,000 in debt to do it, and you net $40,000 out of that,

that's not much of a plan. You could have driven a dump truck for somebody else and made $40,000 and not had any of this debt. Yes, sir. I mean, if he's got a CDL and he's driven a dump truck for somebody else and made $40,000 and not had any of this debt. Yes, sir. I mean, if he's got a CDL and he's driving a dump truck, and he's licensed to do heavy equipment in Louisiana, he can make $40,000, $50,000, $60,000 driving for somebody else. He doesn't have to be in debt to do that. Right? Yes, sir. Okay. So,

unless he wants to change some things, I don't know how to help him. But I can tell you this. A Chapter 11 bankruptcy is not going to help you. It just is going to delay the inevitable. I'm not sure you can tell this guy anything, though, because he didn't call me to ask. You did. So I think the two of you need to sit down with a marriage counselor and with a financial counselor and try to get some help. If he wants to go to a financial counselor instead of going to a bankruptcy attorney, hold on.

I'll have Kelly pick up, and we'll try to line one up for you, and he'll give you the name of someone in your area. Now, they do charge for their coaching, financial coaching, and they'll charge you a little bit for that, but it's less than a bankruptcy attorney, and they'll give you the truth and tell you what's going on, because I don't think you're going to make it out of a chapter 11 in this. I think this thing was doomed before it started based on the way he started this. I'm probably selling off all the assets and then trying to work my way out of the debt or work down the debt, the deficits on the debt, try to do some settlements and pennies on the dollar,

which is basically an out-of-court bankruptcy is what it amounts to, but it actually will succeed that way versus a Chapter 11 or a 13, which by and large don't make it. This is The Dave Ramsey Show. show. Are high healthcare costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable biblical solution to your healthcare costs? Based on New Testament principles, Christian Healthcare Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major healthcare costs. Christian Healthcare Ministries is the original health cost-sharing ministry.

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chministries.org. Paul is with us in Albuquerque, New Mexico. Welcome to the Dave Ramsey Show, Paul. Hey. First of all, I'm not a federal employee, but I recently went through a brief period of unemployment. And because we got debt-free last year and we're on baby step three, we had some emergency savings to fall back on, which really helped us weather the storm. So I want to thank you for the wisdom in the baby steps. Good for you.

They helped our family. Well done. Yeah, it changes the whole experience, doesn't it? Good for you. Oh, absolutely. I'm calling because I'm expecting a salary offer from a prospective employer any day now. The new job is a really positive long-term career move for me. My wife and I have been doing our best to research the cost of living in the new town

to be prepared for salary discussions, but I'm finding such a wide variety of information online. So I wanted to call in and see if you have any recommendations for how to go about my research and what other considerations I should be making in determining whether this is the right move for my family and for our financial goals? Gotcha. Okay, good. You're doing a good analysis, it sounds like. So what do you make now? Current household is probably around $90,000.

But what do you make? I make $70,000. But what do you make? I make $70,000. Okay. All right. And so the job offer, if you were going to guess, is going to be how much of a jump? If I were to guess, probably a $20,000 jump. Okay. All right.

Cool. To guess, probably a $20,000 jump. Okay. All right, cool. But it's also moving out to the outer edges of the San Francisco Bay Area. So a jump from Albuquerque to California. Are you talking about Silicon Valley? I'm talking about out in, like, Livermore area. Okay. All right, cool. All right, well, here's the thing. That's some of the most expensive real estate in the world, San Francisco.

Right. Especially when you get, you know, in the Silicon Valley region, it just goes bananas. So your biggest component in cost of living is real estate and so that's your biggest issue here um you know you're going to see if you go from 70 to 90 uh we're talking about a 25 increase in pay okay but your real estate is going to go up 400 from albuquerque right and so that's that's the big issue you've got uh and that real estate meaning whether you're a renter or an owner uh you're just in a very very expensive real estate market unless you can get far enough away from the san francisco silicon valley

influence to get to get a pricing that you want to do now the other parts of cost of living in that area that you will see substantial change over in New Mexico is taxation. California's taxes are ridiculous, nutty, okay, out of control. And the other thing you're going to see is your other cost of living, food is not going to be, like, hugely different. I mean, you're not going to notice that. Gas for your car, you're not going to notice that. So your, quote, cost of living, you know, your day-to-day cost of living, buying diapers at the Walmart, you know, is not going to be that much different. So you might see a couple percentage points here or there.

So you would take the job in a heartbeat based on that, and you might take it in spite of the taxes because the taxes aren't going to be an additional 25%, and you've got a 25% increase in pay. So you would net out of taxes, and you would net out of the other cost of living. The real estate might be the thing that runs you off. It might be the deal breaker here.

And so you need to go over there and get some shopping done and go, okay, the house we're in here costs X, and how many Xs are we going to be over there to do something similar? And does this $20,000 or $30,000 a year, $20,000, $25,000 a year, and the upside potential, does that offset this? Are we willing to do that? But, you know, you do not get a pass on math because you live in California, you know, because you live in San Francisco Bay.

So you still have to do math, and so you still can't buy a house you can't afford, even if all the houses in the area you can't afford. Now, I think on 90 and if she's working and you've got some upside potential, you can probably do it. You're just going to have to be very selective and very careful and not rationalize the purchase on the real estate side. So what I do when I'm analyzing cost of living differences between two cities, I look at the cost of living and I look at the cost of real estate separately. Because the real estate is the biggest differentiator. The cost of living in Nashville versus living in Albuquerque, if you take out real estate, there's no difference to amount to anything. Both have no income tax.

You've got no income tax in New Mexico, right? We do have income tax. Oh, you do? I thought you didn't. Okay. Well, then you're used to paying some. We've got none in Tennessee. So you look at the tax issue, I look at the real estate issue, and then the other stuff,

by and large, it's not massively different. It's not massively more, you know. Restaurants, I mean, you can always go to a fine dining restaurant and spend more than you spend at McDonald's. But McDonald's in Albuquerque, McDonald's in San Francisco, McDonald's in Nashville, you know, what a burger. Burger in and out burger, whatever. They're all about the same price across those different cities. It's not enough that it changes your life. It won't mess up your finances, know that kind of thing that's what i mean by your cost of daily living

does that make sense it does any any thoughts or recommendations on kind of how to negotiate salary something i don't i don't know that i've done historically well i mean you you've you really are going to get paid for what they can replace you for. That's how they start. And so what can I buy somebody in the marketplace in that area that does that? Now, I would do some research and make sure that they're paying you that, and that is a localized around the San Francisco Bay area for your job description comp study. And jump on one of the ZipRecruiter or Monster or one of those sites

and do yourself a little comp study and say, you know, with what I do, my job title in that region, what does it pay? Because different regions do pay a lot more. And, you know, for instance, you know, if you were in the technical field in and around San Francisco, you're going to make more there than you're going to make, you know, a web program or that kind of thing than you're going to make in Albuquerque. But it would be a lot different than the numbers you're talking about. It would be like double.

And so those are the kinds of things you look at. Look at what they're having to pay for in that area. And if you go, hey, I just did a comp study on this, and it looks like that this job position in your area pays more like $110. I'm curious what you think about that. And just present it very low-key like that and say, they say, well, we did a comp study too. Well, would you mind sending me those numbers?

I'd love to look at them. I'm trying to learn about this, and I'm not trying to rip you off. I just don't want to, and I'm not trying to be arrogant. I just don't want to undervalue my services, and I want to come in and do you guys a great job and add value, but I want to make sure that the pay is aligned because I'm going to be taking on a hugely more expensive real estate market here, and I've got to figure out a way to justify that. So that's kind of the way I would talk about it if I were on your side of the table doing the negotiation.

Just soft pedal it and ask questions and ask for help and, you know, how did you arrive at this figure and, you know, do you have any flexibility in the figure and so on. And people sometimes will go, well, yeah, we can throw another 20K on there. You know, I mean, it's not their money. It's the company's money. They're just making the hire. They're the recruiter. And so sometimes that kind of thing will happen that there's that kind of margin in there,

and all you had to do is just kind of hint at it, and boom, money starts hitting the table. So I definitely would hint at it and ask around about it, poke at it a little bit. But if they're firm and they go, no, we have a very detailed thing. This is how we do it. This is what we do. We've done the research. I'll be happy to share it with you, and that's all we're paying. Then there's probably not any negotiation room at that point.

It's worth asking, and I really do want you to settle the real estate and how you're going to handle that in your mind before you take this job. This is The Dave Ramsey Show. I had a conversation with a friend recently, and he told me about a young man in his late 20s who died suddenly with no life insurance. Now, I don't want to sound unsympathetic, but this drives me crazy. What are people thinking? I don't understand how taking care of your family isn't a top priority. Most of you probably just spent a bundle on Christmas on things you didn't really need,

and now you're making New Year's resolutions that are focused on yourself. But have you taken the time to do something really important like protect your family? If you want to use the New Year as a reason for doing something right, then do it. Term life insurance is something every family needs, and that's why I talk about it every day. It's not complicated, it's not expensive, and you need to do this right now. Zander Insurance is the only place I recommend. Visit zander.com or call them at 800-356-4282. Please learn from other people's mistakes and get this taken care of. Zander.com. In the lobby of Ramsey Solutions, Ethan and Katie are with us.

Hey, guys, how are you? Hey, Dave. Better than we deserve today. Welcome to Nashville. Where do you guys live? Auburn, Alabama. All right. Well, welcome here.

Good to have you. And all the way up here tourn, Alabama. All right. Well, welcome here. Good to have you. And all the way up here to do your debt-free screen. Yes, sir. How much have you paid off? $151,098. Love it. And how long did this take? 39 months.

Cool. And your range of income during that time? From $65,000 up to about $147,000 before taxes. $65,000 to $147,000. Okay, cool. What do you all do for a living? I'm an occupational therapist. Okay.

And I'm a school liaison officer. I'm a DOD employee. I'm formerly a school teacher and coach. Okay, good. Good for you guys. Fun. So what kind of debt was this $151,000? Every single penny was my student loans.

Just you. Wow. Just me. Okay. And your degree is what? Master's in Occupational Therapy. Okay. Obviously. Okay. Cool. Very good. So how long have you two been married? About two and a half years. Yes, sir.

So you started this before you even got married? Yes. Yes, sir. Okay. Been in attack mode for a while. And Ethan, he gets the idea, I'm signing up for some student loans here. Yeah. He was very encouraging that I go through Financial Peace University once I graduated, so I really didn't have a choice. Encouraging.

Yeah. If I'm going to sign up for this, you're going through the class, right? Right. Exactly. Okay. That's fair. It's not a bad trade. So, Katie, when you went through the class, what did you, you guys went through together, obviously.

Yes, sir. Pre-marriage counseling or post-marriage counseling or something. And so, what did you get out of that that caused you to be able to pay this off? Well, I grew up in a pretty normal home. They had, my parents had credit cards um they had car payments everything that was normal um as americans and i didn't know people like ethan existed paid cash for cards or cars and um you know didn't have no credit, no credit cards, anything. And that was totally foreign to me. You married a weird guy.

Yeah, I did. I did. I did. Fun. Very cool. Okay, so I got to hear this. So, Ethan, where did you learn to live like that? My parents.

My parents were very fiscally conservative growing up. They had credit cards, but I didn't know credit card debt was a thing because every month they would pay it off, that kind of thing. Never always paid cash for cars and made sure that they were living within their means. So you guys are two sides of the same coin. Yes. Okay, so I've got to hear how this goes down. You're dating.

It's starting to get a little more serious, and you start to realize that looking across the table at dinner at me is the person that is the exact opposite in how they were raised. Both of you. Yes, sir. I mean, you're looking at Ethan going, you are from another planet, and Ethan's going, you people act like you're in Congress. I mean, y'all had to have, that had to be, that first discussion or two had to be fun.

It was, yeah. That first budget meeting that we had whenever we got married, that was fun too. That's where a lot of progress was made. I mean, you really were polar opposites. So tell me the truth. I mean, I'm not just joking around. That first date when y'all were starting to get serious enough that you actually talk about stuff like money, And this comes up. How did that sound? What did that go down like? Well, I told him I was going to try not to cry. But I loved him so much that I would do whatever I had to do to spend the rest of my life with him. And I knew that just being in the family that he was, I knew that that wasn't the debt that we had, wasn't something that he was going to be okay with.

And I wasn't okay with it either if he wasn't. So we really got serious and ended up having five jobs between the two of us at one point. And we got it taken care of. Wow. Wow. So you just looked at him and said, I'm game on. Yeah. That's it. Okay. And Nathan, you're looking at her going said, I'm game on. Yeah. That's it.

Okay. And Nathan, you're looking at her going, what am I getting into? I mean, what were you, you're looking at, I mean, obviously she's worth it. That's not the question. Right. But you're looking at her going, did you have a gulp moment? Of course. Yes, sir.

It was, and it was a month probably just processing how are we going to do this and getting the game plan together. And then once we got married, just diving directly into it. And it was a month probably just processing how are we going to do this and getting the game plan together. And then once we got married, just diving directly into it. And I know a lot of people have Dave cars, but we even had a Dave house. The first place we lived was a 70-foot single-wide trailer in the middle of the woods. Oh, Lord. That had some issues is all I'm going to say. Wow. Wow.

You know, people ask me all the time, should I marry somebody that's got debt? I don't have debt. Should I marry somebody? And obviously, you did. And obviously, it's worked out beautifully. But I tell them, debt is not the problem. The problem is if they're going to be game on. Are you going to be able to get on the same page and get rid of it?

And Katie looks up and goes, yeah, game on. We'll do this. And so that made that part easy. And then you go, well, we can knock this out. And that made you be okay with the relationship going forward, right? Yes, sir. Okay. So what if she had gone, well, I kind of like, I mean, it's not that big a deal.

Everybody's got that. I don't think I'm going to worry about it. Would that have been a deal breaker? Probably not exactly. I'm pretty to worry about it. Would that have been a deal breaker? Probably not exactly. I'm pretty persuasive, and she understands numbers well enough where I think I could have converted her to our side eventually. Yeah. But if you thought she wasn't convertible, if you thought you were going to have to tote this debt around for the next 25 years, that would have killed the deal. Yes, sir.

It had to. I'm just looking at you. I mean, you guys're you're so fun you're a great couple this is great i mean this is very fun well done you guys i'm proud of you so who are your biggest cheerleaders outside of the two um our parents were both huge uh influencers on us um your mother wasn't freaked out that he put you in a trailer in the middle of the dadgum woods. She was. She was. All right. You know, she would call if she knew that he wasn't here to make sure we were or I was okay.

But, yeah, both of our parents, they understood that Christmases were not exactly what people thought we could afford. And they knew that we made a lot of sacrifices as far as family trips and stuff like that. And we just told, we had to explain our story to them and why we were doing what we were doing. So what are you, 28? I'm 29. 29?

And I'm 27. Yeah, I thought so. Okay. Yeah. You're game on. You're rock star millennials. I love you guys. This is so fun. So well done. Okay. Yeah. You're game on. You're rock star millennials. I love you guys. This is so fun.

So well done. Okay, so the secret to getting out of debt is? Delaying gratification for sure. Being able to suck it up and weigh what is a need versus what is a want. Be able to handle that and have a teammate in your corner that's willing to get game on with you and figure it out together. Yeah. What do you say, Katie? Well, during the whole process, the first year we were married, Ethan worked seven days a week.

And so whenever he would get home, he wouldn't feel like doing dishes or folding clothes or anything like that. And, you know, if I worked seven days a week, I wouldn't feel like doing anything like that either. So just really having grace between each other was a really big part of that. And just keeping each other grounded and focused. And I know that whenever I would get my mind off of things, like I wouldn't listen to the podcast as often or, you know, I would just kind of lose sight. Ethan would reel me back in. He'd be like, well, is that in the budget? Or, you know, just keeping me grounded and encouraged. You guys are special.

You make a lot of money. You're 27, 29 years old. You don't have any debt. How does that feel? It feels like the best kind of weird imaginable. Yeah, it's weird that we're not sitting down at the end of every month now and saying, well, how many thousand dollars can we put towards loans this month? And we've actually got our Baby Step 3A finished now,

so it's a weird feeling. Very good. It's weird feeling. Very good. It's really weird. Very good. We've got a copy of Everyday Millionaires by Chris Hogan for you, number one best-selling book because you're going to be Everyday Millionaires. Thank you. Before you know it, you're going to be really fast.

Well done, you two. We're very proud of you. I know your families are. $151,000 paid off in 39 months, making $65,000 to $147,000. Ethan and Katie, count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Whoa! Woo-hoo! I love it. Oh, that's powerful. That's good stuff. Oh, you can do this. This is the Dave Ramsey Show. Well, folks, we've got exciting news. The brand-new book by Chris Hogan, Everyday Millionaires,

How Ordinary People Built Extraordinary Wealth and How You Can Too, is a number one national bestseller. Now, this book is based on the largest study of millionaires ever done. Over 10,000 millionaires were studied. It is not a white paper about the research project, but we wanted to do a large enough research project that we could give you definitive answers about what millionaires are and what they aren't. They did not inherit their money.

79% inherited zero. Another 5% to 10% inherited not enough to become a millionaire so somewhere around 90 of america's millionaires are first generation rich started from nothing eight out of ten of them came from families at or below middle income level when we asked 10 000 millionaires what they did, the number one answer was engineer, number two was accountant, number three was teacher. Eighty percent of them used their 401K to be wealthy,

and the typical one paid off their debt in 10.2 years. You're not going to hear a lot more statistics than that in this book. So if you wanted to just know the stats, that's some of the highlights of the stats. There's 25 or 30 more, but that's the highlights of the stats. So the bottom line is that what we want to do in this research project is figure out if you can really still do this. And the answer is you can. We have definitive definitive researched proof and 30 years of doing what i do

as anecdotal evidence to show that you can do this i also will tell you it's not easy to become a millionaire if it was everybody would freaking do it it's not easy living on less than you make is not easy staying out of debt is not easy saving up to pay for stuff is not easy living on a budget is not easy but neither is being broke and deeply in debt and stressed and retiring and saying i hope the government will take care of me because they're well known for their ability to handle money that's a stupid butt statement people say that subconsciously every day you say that when you save nothing for retirement. That's what you're saying.

I save nothing for retirement, which means someone else is going to care for me. That's what that says. Where do you think this is coming from? It's absurd. So this book, number one, you can get the book anywhere books are sold. It's a number one bestselling book, Everyday Millionaires. It's going to tell you some of the stories of the millionaires. It's going to have some of the stats.

If you want a white paper research project on statistics, do not buy the book. That is not what this is. This book is going to convince you, though, that you can do this. It's got the stats in it. It's got the stories in it. And it's got Chris Hogan, Coach Hogan, coaching you along saying you can do this. One guy said it's very understandable, very understandable steps on how to best save, manage my money to become a millionaire.

There it is. Love it. ChrisHogan360.com, DaveRamsey.com, or anywhere books are sold. Tiffany is in Grand Rapids, Michigan. Hi, Tiffany. How are you? I'm honestly doing wonderful. How are you? Better than I doing wonderful. How are you?

Better than I deserve. What's up? Wonderful. Well, it's an honor to speak with you, sir. My husband and I, we are so close to being out of baby step two. We just have our student loans paid off, and hopefully by our one-year wedding anniversary in May, we have about $26,000 left on them. And then we can start paying off the house. Now, we have an idea as to where we want to kind of plan on for this next step. My question is, my dad went through a divorce and bankruptcy, and he got all the kids' plus loans under his name and this is something my husband and I feel very strongly about helping him with um since I I did stupid debt and went to university for five years um and so we're wondering first off where in the baby

steps would we put that if it's not out of bankruptcy until the fall? We're not, sorry, I should also preface, he's not wanting me to pay for all of them, and I don't want him to pay for all of them. It's about $94,000 in his name after all this interest has accrued. And how old are you? I'm 27. Okay. And what is your household income? So this last year, I think we made about 80.

We're hoping, I'm commission-based, to make about 130 this next year since we both started a new job. Okay. And I think the story I'm hearing, and you correct me if I'm wrong, is that your mom and dad took out loans to send you to college. And then they divorced, and your dad got saddled with them. And my dad didn't. He wanted to help us out, but my mom kind of originally said, hey, if you don't do this to help the kids, I'm going to leave you. And then she did anyway.

But that's not the issue. The issue that I'm wanting to make sure I've got clear is, at no point in the conversation before you went to college or while you were in college, did you say, these are my loans. They said, we're going to take care of our kids. We're taking out loans to send them to school. I was a little bit completely absent-minded to the whole fact. That's not what I'm saying.

There was no time that your dad said i'm taking out these loans and you are promising to pay me for them correct that never happened no so i i want to clarify i don't mind you helping your parents with their mess but this is their mess okay you're 27 years old this is your parents mess your parents made a mess and i'm sorry they're in that and i'll be happy to try to help your dad any way i can but um you're not in a position to help him you're broke and you just feel and you just feel bad for him i really do yeah but i want to set you i want to set you free from that. You didn't make this mess.

Your dad and mom are a mess. Their marriage was a mess. Their finances were a mess. They're a hot mess. Is that right? Yes. Their dad and mom, we love them. We're not mad at them, but they're a hot mess. And, you know, you don't call your 27-year-old kid doesn't come along and clean up your hot mess when you're in your 50s.

That's not how this works. So what I would tell you to do is maybe not what you're going to do because you feel so boundaryless in this issue, but I would say that you and your husband need to get your financial act together. You need to get out of debt. You need to build your emergency fund. You need to start building wealth. And some years down the road, not now for sure, if you have some extra money

and you want to give it to your dad in the name of this issue, that's fine. But you guys need to get out of debt, get your life started, get an emergency fund, buy a house, and save up a bunch of money. And then if you've got an extra $50,000 and you just want to throw it your dad's way as a wink and a nod, a tip of the hat to say thanks for my education, that's okay. But you don't have a moral obligation. You sure you have you don't have a moral obligation you sure as crud don't have a legal obligation and you don't you don't have anything here except just a guilt trip right and he this was kind of our idea going into it um he never brought it up i

just i i guess i did feel bad um one of our thoughts since we do have a house, we have about 60 left on that and we have about 60 in equity. We both want to build our next home and pay in cash for it. We had contemplated selling the house. We both want to live in downtown Rockford. In Michigan, it's just beautiful just to experience it for a year or two. We thought about maybe renting, and then with the equity, it would pay off everything, and then we would still have a nice chunk for down payment saved up for, and we would just add on to that. Do you think maybe that would be a good idea? As long as you're 100% debt-free, you have your emergency fund in place,

and you are living your life properly, and extra money above all of that is what you would help your dad with. I am not going to put the burden of cleaning up their hot mess on a 27-year-old daughter. That's just wrong. If you want to do it and you're healthy financially enough to do it, that's okay. You're not today, though. You're going to have to make some of the moves you're talking about or thinking

about to be able to do that. You need to get off this guilt trip. You're doing this with the wrong motivation. This is charity. It's not obligation. This is the Dave Ramsey Show. Hey, it's Kelly,

associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.