The Ramsey Show - App - Big Life Changes Demand Bold Money Decisions

Episode Date: February 5, 2025

Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting this with best-selling author and host of the Dr. John Deloney Show, John Deloney. And your best friend. And my BFF. You don't have to say that. My good friend, John Deloney. So we are answering your questions about your life, your relationships, your money. So give us a call at 888-825-5225 and we are here for you. All right, starting us off this hour is Holly in Portland, Oregon. Hey, Holly, welcome to the show.

Hi. Hello, hello. What's up? Hey, I have a difficult question and I'm really glad that I get to talk to both of you about it. Absolutely. Let it rip. Okay.

I have to have a really hard conversation with my husband. I have to basically tell him in a loving way that I really don't care what his dreams and aspirations are, that I really just need him to get a better job. Fantastic. This is incredible. Okay. Dig in. I don't care. Like this is incredible okay dig in i don't care like this is a wife she's really resolved that's all i'm gonna say holly knows i love it this is a wife at the end of her rope i don't care what your stupid dreams are i don't care when this when you think the avon sales are gonna finally come through you just need to make money we're hungry like So yeah, tell us where you're at. Okay. So we've been married for 17 years and we have five kids and another on the way. Oh, wow.

First 10 years, he was active duty in the military. That was really, really hard on our relationship. And we made choices. He chose to get out because our family is more important and that stability is more important. And we made choices. Like I gave up my career. I'm a preschool teacher by trade and gave that up to be with our kids. And we, I just, he's underemployed. He's working like. Yeah, what's his situation now job wise? He took a job that guarantees him 30 hours a week as a school bus driver. He has two degrees that we already did the hard work of getting.

Like he got those since we've been married. How is he supporting five kids one on the way with being a bus driver um it's really hard he does get some disability um but it's not like complete or anything and holly is his is his mindset like he's happy because he has time with the family it's not that that much. I'm not stressed and all of that. Or does he feel undervalued at all? Like, is he looking or talking about other things? He's such a sweetheart. I think he really likes what he does.

And he loves working with the people he works with. He's job hopped. He's experienced a lot of job loss since he left the military. And he finally has found a job that he really likes or the people really seem to appreciate him. But it doesn't make up for the fact that he's underpaid. And we're hustling.

We're on baby step two. We're like really working the debt snowball to the best of our ability. I have been working like 50 hours a week trying to open my own daycare, which didn't go well because of other things, but I've been working and bringing in as much as I can. And so the problem is that all these side hustles brought our income up to the point where we're bringing in almost $10,000 a month, but I'm due soon, and most of my students have left because of my pregnancy, which is understandable. And you're working so much to make that versus having a 40-hour-a-week job where you're making 80 or whatever it is. Yeah, but how much, so Holly, what I'm hearing underneath everything is how much of this is, and all of these things are real and they're not inherently bad.

I just want to get to the honest pain point here. Number one, when I was, I'm trying to think of my last title. When I was the Chief Student Affairs Officer, Dean of Students slash Associate Provost, I don't remember what my title was. It was long. I remember my wife, and this is her laughing and joking, but also,

like when she was at a dinner party, she sure liked saying, my husband is a Dean of Students and a college executive, then a YouTuber. Doesn't matter that financially we're better off. Doesn't matter that I'm helping way more people. It was a funny thing, but she's like, yeah, it was cool. And I got to say that. So is this, you don't like going to talking to other moms and saying, well, my husband's a bus

driver. Is that number one? Number two, I hear you, you've entered into comparison world or scorekeeping world. And that's a dangerous place for relationships. I gave up my career. I'm doing this. I'm working so hard and I'm about to not be able to work hard because I'm giving, I'm creating another human I'm about to give birth to. And so is this about you keeping score and saying, Hey, you're not as tired at the end of the day as I am. Or is this, I'm looking at a man I love who can give value to the world and we don't have enough for groceries. Where's the pain point here? Or maybe it's a cocktail of all of that. I, I, um, I didn't grow up with money or anything. My, it doesn't matter to me what he does. I don't

care about his title. Um, and, and I've been a stay-home mom off and on, and that's what I would prefer to do. But I'm fine with making sacrifices for our family. I'm not asking him to do anything that I haven't done. And I think he sees what I do and acknowledges it, and it's very grateful. I don't think it's a comparison thing for me. I think it's just that I'm scared because we're about to lose half our income. That's where you start. That right there is the most honest statement because that's different than you called in saying, and again, I'm with you, not at you. Okay. So, but that's you calling in saying, I'm about to have to tell my husband, I don't care about his dreams and his whatever. He's got to get another job. That's different than you saying, hey, honey, we're about to face a math problem.

And me as a stay-at-home mom of six, I'm terrified. Well, I tried to have that conversation. And he's like, well, maybe I want to be a teacher, which means he has to go back to school. And then if you look at the salary that it's starting pay for teachers in our state. Yeah. You don't, y'all may like, this sounds awful, but y'all made choices to have six, to create six humans. And so that means you can't afford to make $42,000.

That's, that's the trade. Yeah. And or live in Portland, right? Right. Well, we live outside of Portland in a much cheaper area, but he thinks he can make up the gaps with the side hustles, which we've been doing. But y'all aren't going to be able to do side hustles anymore. You're out. Yeah, and the side hustle world is for a season. It's not ongoing to support a seven-person family. And he's up against time. He doesn't have any more hours in the day

to do another side hustle he already has like two part-time gigs plus his bus driving so i i if i if i'm you i would sit down and start with i want to map this out for the next six months i want us to be honest about the money. Not, well, I hope here, and I think I've got a deal here, and I'm trying to build this. We're not at that place right now. I want to be honest about

what's coming down the road for six months. We need to sit down and make a plan. I'm scared to death. Will you help me with this? And this is not, that's how you get underneath the dream part. I need this written down. How much money will you bring in from these side hustles? Not fantasy, not fiction. I needed to know based on

the last three months, what are we going to do the next three to six months? And then you look and say, we don't have enough money for you to go be a teacher. I want you to be, we need good teachers. I would love for more men to be teachers, but our family as for us right now, we can't afford to do that. And so we're going to have to make some, we're going to have to make some sacrifices, whether it's time, whether it's this quote unquote passion and purpose right now, we can't afford to do that. And so we're going to have to make some, we're going to have to make some sacrifices, whether it's time, whether it's this quote unquote passion and purpose right now, we just can't do it. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession, business taxes will go up or down. AI will help us work or it will replace us all.

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focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Well, John, you're going to be busy this spring. You and Dave are hitting the road. Yes, it's going to be a wild tour, me and Dave. Yeah, the Money and Relationships Tour. You guys are going to Louisville, Durham, Atlanta,

Phoenix, Fort Worth, Kansas City, all through the end of April and early May. So if those are any of your cities near you or you want to travel to, destination cities, make sure to see if you guys can come because you guys are really creating this event in a really unique way Make sure to, yeah, see if you guys can come because it's going to, you guys are really, you know,

creating this event in a really unique way that the audience gets to decide a lot of the content in each of these cities, which is so fun. Yeah, and it will be wheels off, which I'm looking forward to. Wheels off the bus. Yeah. You are one of only like a few people on the planet

who have had the experience of being on stage with Dave when y'all kind of have an outline of what y'all are going to do and then he just gets in the driver's seat and he hits the gas and you're like oh this is where we're going so here we go right and so I'm I am as nervous for this as I've been for anything in a long time I can't wait yeah it's gonna be it's gonna be fun so go to ramsaysolutions.com slash tour and get your tickets for the money and relationships tour with Dr. John Deloney and Dave Ramsey. It's going to be train wrecks on stage.

It's going to be fantastic. Wheels off the bus. I'm just kidding. Nowadays, people like in, you know this, we both do it, but you get on like a tour cycle. And so if you hear like your favorite person on a podcast and you see them pop up, sometimes we just have the same points,

talking about the same thing. What I love about this is if whatever night you show up it's going to be a different event man and that's i i don't get to do that very often so i'm excited yeah that's gonna be a blast so great so great all right next we have andrew in dayton ohio hey andrew welcome to the show i appreciate you having me absolutely how can we help so i'm in a bit of a particular situation right now. Just to kind of debrief you on my situation, I have no debt other than a mortgage. Me and my father are in a little bit of a dispute whether I should pay off my current mortgage, which is on an investment property that I don't live in, first, or save as much money as I can and put it into a primary residence.

Where are you living now? I'm currently living around Dayton and I still live at home with my parents. Oh, you're home. Okay. Is this disagreement your dad wanting you to get out? It's not a matter of that. In my culture, you don't move out until you're married. And I'm going to be married here in 56 days. Oh, wow. I thought I was counting down by the minute.

But congratulations, brother. That's awesome. So where are you guys going to live? I appreciate it. You and the wife. My parents have a second home that they're allowing me to live in. All I have to do is just pay the expenses so they break even. Oh, okay.

I'm very generous with them. For sure. Is this a long-term thing or is this just like hey the first couple years you know don't worry about rent you guys can live here but you will eventually get your own place or this is this property from your parents deemed to you guys like long term uh they've said we can stay in it for as long as possible personally i don't want to take advantage of their generosity. Sure, sure. So my goal is to get in and out of there within two years. Well, yeah, yeah, for sure.

And if that wasn't the case, I didn't know, like, what situation you were in, if it was going to be deeded to y'all eventually, you know what I mean, or something like that. But if you guys, I would want you guys working towards your primary home for sure, so that you, you know, have the ability to go and buy something when you're ready how old are you guys uh i'm 21 and my fiance is 18 okay okay great um so how much is left on the rental property 173 000 okay and how much will you guys be making combined household income after you get married? The problem is I work in sales. Pretty much all of my income comes from commission. So that's kind of speculative, but I'm going to say somewhere in between $120,000 to $140,000.

Okay. And what will she be doing? Good question. You should find out you're getting married in 56 days,000. Okay. And what will she be doing? Uh, good question. Um, you should find out you're getting married in 56 days, dude. Like, is she going to school or will she be working? Uh, she was going to school. She stopped because she realized the degree she was going to was probably not worth it, but she is working right now. Okay. How much do you think she'll bring home? Probably around $40,000. Okay. Okay.

So you guys are at $180,000. Oh, I meant $140,000 combined. I'm sorry. Oh, okay. Okay. Together, you guys. Okay. I'm sorry.

I got you. And the rental property, how, tell me about that. Was that you and your dad together doing that, or is that, is that just under your name? Uh, it's just under my name. Okay. And why are, what, um, I'm just curious, why aren't you moving into it? Um, what's causing you to have this property? It generates, it generates too much money for me to just, and I'm moving into it, to be honest. Okay. Yeah. But if you, but what are you going to pay out in rent if you go rent your own place? I mean, probably $400 or $500 a month. Okay. That would be the difference?

Well, each side of the property generates about $1,200 a month, and my parents only really want me to pay around $400 to $500, which is just the expenses. Yeah, but that's living in Mommy and Daddy's house. So when you decide you and your wife are going to move into your own place, what will your rent on that place be? Oh, I'm not looking to rent. I want to buy it. Wait, I'm sorry.

Are you talking about the house I'm moving into? No, here's what I'm trying to, the picture I'm trying to paint for you. Um, as a 21 year old, you're so far ahead of the game. You're thinking about owning your own business. You're thinking about becoming a property owner and a property manager and all that, which is awesome. I'm proud of you. Um, and so at 21, as a salesman making an unstable commission, like you have great month, you might have a good month and then you have three or four low months, just that steady drumbeat where it feels like you're getting $2,400 every month, minus your mortgage on that place, minus the expenses, minus the depreciation, minus the upkeep, minus the, minus the oh hey we need to do a new roof minus

the hey the air conditioner went out minus the hey the they flushed a whole bunch of grease down the toilet and so now we have to replace the sewer main like minus all of that stuff what rachel and i are trying to i guess trying to gently steer you in what feels like a so much money you can't afford to sell it or move into it yourself, what I'm telling you is in five years, you're going to much rather wish you had a paid-for own house than have a paid-for rental house, and you and your wife are still trying to figure out how you're going to pay your mortgage every month. So it feels like a lot right now, but you all haven't had a big expense.

You haven't had the thing almost fall down. You haven't had that kind of stuff that hits every single home manager out there. Do you hear what I'm saying? Yeah, that makes sense. That was kind of a third option that I kind of floated that I never really took seriously. I probably have $150,000 in equity in that house. I can sell it, 1031, exchange and into a primary if I need to. If I was you, I would spend one year at this gift that my mom and dad are giving me and we

would save every possible penny and I would sell the rental property. Yeah. Live on 40 or something. You know what I mean? Like if you don't have rents coming up. Put 75 grand away. Yeah. Do that for about one or two years and golly you could put yeah 150 200 sell your place that's 350 go pay cash for a house right up to the sunset if you guys want to get back into the rental game then do it from with some cheap you know 150 000 property that you guys save up over time because you have a paid for house like just just know this if you could figure out a way at 25 or 26 reverse engineer this yeah we have a paid for primary house, me and my new wife.

We've been married five years. We're going to start having children. We're driving kids and we have a paid for house, no mortgage. I'm telling you right now, you have set yourself on, have you heard the phrase in the, because I can tell you read all this stuff. Have you heard of take care of your long tails? Have you heard of that phrase? I don't believe so. Okay. So if you think of a distribution on a bell curve,

the long tails are the way outside of the bounds things that almost never happen except for every single person they do happen. And what I mean is every single day of your life, you don't get a cancer diagnosis. Someday somebody you love will. Okay. That's taking care of your long tails. Long tail is the market will go up. Rent will go out. COVID will happen. Renters won't pay. Whatever happens, you'll have a legislative change in your state where they say you can't evict people. Who knows what happens down the road. But if you've taken care of this long tail that nobody can take away your primary home, you and your wife have a home that nobody can take. It allows you to anchor off and really go after true wealth creation. Yep. So Andrew, I think what I would do is I would live rent-free in your parents' home,

let your property continue to appreciate, that's fine, but then eventually have the goal to sell it probably in the next year or two. And exactly what you're saying, move all that equity over to a primary home with the money you've saved, And there's a good chance you could cash flow primary home. And then if you guys want to get in the rental game, do that later with cash. But that's a lot of races, man. That's a lot of peace, Andrew. Congratulations. Hey, guys, I'm Jade Warshaw. And I want to talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your

budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey. There you'll find helpful resources like a student loan rate table, a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay. But if your situation is more complex, sign up for a free 30-minute consultation with one of their student loan

refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people, it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Welcome back to The Ramsey Show. We're taking your calls at 888-825-5225. Up next, we have Dan in Houston, Texas. Hey, Dan, welcome to the show.

Hi, thanks for having me. Absolutely. How can we help? Well, first I want to give a shout out. I started with Dave's program many years ago. I'm 67 now, and by the time I was 55, I could retire. Now I'm doing the things I love and volunteering. So well done, Dan. Congratulations. Trying to spread the word, you know. But so I'm working on brevity here. So there's four of us kids. I'm the oldest of 68. The youngest is 60, 61.

And number two is my sister, and she's the administrator, the trustee of the estate. And so my mother's 95, and when she passes, we all receive between a half a million and $750,000. Oh, wow. So, yeah, you know, life-changing money. we all received between a half a million and 750,000. Oh, wow. So, yeah, you know, life-changing money. You know, my wife and I are both debt-free. I mean, literally no debt. Dave would laugh if he heard that my truck has 300,000 miles on it.

He'd tell you to go get a new truck, Dan. He would. Go get a new truck, Dan. I'm telling you, go get a new truck, Dan. Thanks, guys. I'm kind of in love with this thing. So the problem is the two youngest ones have asked my mother for money before over the years, both a little bit over $100,000. thousand and um one one of uh one of them number three has a nine hundred dollar car payment twenty four hundred dollar a month apartment payment about 160 000 credit card debt and even though she makes six figures cannot you know emotionally control her spending um the youngest one we

inherited about a hundred grand from my father some 10 years ago. And I said, if you blow this money, I'm going to punch you in the nose. And six months later, he had a quad and a snowmobile and didn't pay off his house. You know, he's been bankrupt. Did you hit him? Just kidding. No, no, no. The problem is, I'm not too worried about it.

I've been working since I was 13 and my sister's a hard worker too. But the problem is, is she's worried they're going to come to the door, you know, when they're 70 or 80 begging for money, you have money, I have no money. And we're trying to figure out how to handle the coming basically tsunami of what they're going to bring to the table. Now, the trust comes in two parts. The one trust, everybody gets an equal share right away. And then the second trust, my sister and I both get our share, but those two, my mother broke it up so that it's like five years apart, something like that. But if you have any advice for how to handle people who blow through money, have no control,

I've got my brother on Dave's program. He was good for a year and then fell off the wagon. Hey, Dan, here's the hard thing. I'll answer it, but here's the hard thing, okay? Yes, sir. The answer to this question has nothing to do with them okay you know i told my sister that i said i have no problem you know in my heart knowing that i over the years over 20 30 years going on 40 now i have i have ministered i have given material I've done everything I can but here's the thing

it was never about you right they're struggling and so it sounds like especially your sister but I'm sure deep down you're dealing with it too is

you're frustrated at the future guilt that may come your way boy yep you're nailing it on the head but here's what's hard if you live like that right now what you, yep, you're nailing it on the head.

But here's what's hard. If you live like that right now, what you're doing is you're not mitigating the guilt in the future. You're just spoiling today. You're absolutely right. And so I'm going to choose for peace and joy and warmth and laughter in the right now, and I'm going to be very clear about my boundaries moving forward. Right.

And so the harder conversation will be sitting down with your brother and sister who are adults who could have never like they could care less what you have to teach them they think like i'm sure they're when they get coffee together they're talking about you got you and your sister all they do is work and they never whatever is is saying hey here's the distribution um there there's don't come for us to us is saying, hey, here's the distribution. Don't come to us. Right.

Or you and your wife sit down. And you're saying, just saying it out loud when you guys all have to. Yes. I heard Becky Kennedy say this. Dr. Kennedy say this, and I loved it. She said, a boundary is something that requires nothing from anyone else other than you. Wow.

That is awesome. So you're going to set this boundary. We're all going to be clear. There's no more money after this. And if you as a loving brother want to say, I'll hook you up with the Ramsey Solutions, I'll hook you up with the plan that set me and my wife free, y'all want that?

Great. I'm not going to preach to you. I need everybody, I need to be on record that y'all are getting a check for $750,000. Y'all are going to have to learn to manage this because when you're 80, you can't come knocking on my door. Here's the other side of that. You and your wife might sit down and say, when that day comes, are we really going to leave our brother on the street? And if not, then say, okay, then we'll start a small fund.

Like y'all get to decide what you do with that moving forward but what y'all are doing you and your sister are doing is you're living every minute frustrated by things that other grown adults are choosing to not do and they haven't really happened yet either and they haven't even happened exactly and so you're 100 correct uh bernie brown calls it dress rehearsing tragedy i love that so you're practically you're already having imaginary conversations that you're at 82 are going to have with an 80-year-old little brother. Don't do that. You're just blowing your, like, you should be laughing, especially when you're truck shopping, because God, get a new truck, dude. But, and I'm playing with you. My truck has 200,000 miles, so I'm with you. No, no, no, that's awesome. I'm with you. But you get what I'm saying? Oh, yeah. And, you know, I've actually had this conversation with my sister. And my wife and I are in a new marriage.

And some people didn't like the idea that we got married and all this kind of stuff. And I'm like, look, this is all about us now. Yeah, they don't get a vote. Who cares? Right, exactly. And it's really tearing my sister up. And I think that we sometimes live under this illusion that we can change people,

that if we say the right thing or we give the right book or we do whatever it may be, that that's somehow going to be the magic moment of the light bulb going off in their head of like, oh my gosh. And we put that responsibility on ourselves. And I hear this more from your sister, the way you're talking about your sister and so yeah maybe you hang up with us and

call her and relieve her right i mean like tell her about this call but you both don't need to sit there feeling this like hero complex that we are it's it's our responsibility somehow to change our 62 year old sibling yeah but also your parents put her in a very maternal role. They did. And my, my, they were really bad with money and came into it late in life. And my sister and I have been working literally since we've been 13,

which is fine. We both love working. And sure. But you know, to think that I'm going to give it away to somebody who's lived this profligate life. It's just ludicrous. Here's the deal.

I would sit down with your sister and say, as your little brother or as your older brother, I want to remind you, they have a mom. And it's not you. All her job is to distribute the funds in the way that mom asked. That's it. Not manage everybody. I'm not going to manage you. I'm not going to try to pseudo parent through mom from the grave.

I'm not doing any of that stuff. Put all that weight on her. That's it. I mean, yeah. She has to decide I'm not going to be their 78-year-old mother. I'm going to be their older sister just doing what mom asked me to do. Yeah. Well, this is pretty much what I've told her, and she's still in fear.

You know, she has that guilt like you guys were saying. And, you know, I learned this volunteering at the hospital. A man once told me, he goes, you know, you see a crisis based on how you're living, but they don't see a crisis. That's right. And they don't, you know, they don't see a crisis, but they're still asking for money. They sound like a lot of Americans right now

that think it's just going to continually go on forever and ever. Amen. And it's not. Yeah, and Dan, too, you can be a great listening ear for your older sister, too, but don't carry her weight either. That's right. Yeah, because part of your call has been a lot of her concern, too. That's right.

And don't carry that either, Dan. You know, it's this like kind of individualness that I think is really important for you guys because you're taking on a lot. Your sister's emotion that's doing things well, but she's frustrated and fearful. And then the siblings that aren't. And just because you feel guilty doesn't mean it's not the wrong decision. Just because you feel guilty doesn't mean you're doing the wrong thing. You're a good man, man. Congratulations. Thanks, Dan, for the call. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas,

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WhyRefi, oh gosh, YRefi defaults to loans and builds you a custom loan based on your ability to pay. I skipped a line. So kick your private student loan debt out of your life by going to YRefi.com slash Ramsey. That's the letter Y. All right, don't say it. R-E-F-Y.com slash Ramsey may not be available in all states. I'm terrible sometimes. This segment is also brought to you by Bob's Reading Course. Bob's. Teaching Rachel Cruz how to read. I'm re-saying the same line again. Not correct. The Why Refi people are like, man, we got our money out of that ad. Listen, Why Refi, it's incredible. It is. It takes your defaulted private student loans,

creates a new loan with a low interest rate that will fit in your budget. And it wonderful we don't talk about refinancing debt majority of the time we don't we don't recommend it but with private student loans we do so there you go go to yrefi y-r-e-f-i.com words what's that neighbor got to he's like there's just so many words when you read there's words everywhere today's question comes from alexandra in arizona my 14 year old daughter claims that all the kids in school do we just i just had this in my house my 14 year old daughter claims that all the kids in school are buying lunches from local eateries and spending as much as 20 bucks a day on takeout food rather than bringing their lunch not allowed at our school no outside takeout food keep going my wife and i are on baby step two and have another

65 000 to go we simply cannot afford this how do i explain to this to my 14 year old without in her words making her feel poor um i think underneath all of this i'm just going to tell you rachel how i experienced this very similar um the school my son goes to has an extraordinary cafeteria and i for me and sheila it's less about the finances and it's more about i want him to participate in food um creation and food consumption i want him to know that food just doesn't materialize out of thinner right and so that may that's a little little house on the prairie for us i know but so you don't let him buy from the cafeterias that's right so he has to be a part of making his food um and so underneath this though i struggled with my kids the only one

and so i think alexandra it's less about you worrying about your 14-year-old feeling poor, and it's more about you feeling guilty that your 14-year-old has any sort of uncomfortable feelings. And that's where you need to deal with this. So if you can't afford it, then the way you go straight into that is sitting down with your daughter and letting her walk through your budget with you. She's 14. She's a freshman in high school. She can do that. And you look at her and say, we're working really hard to change our family tree. We don't have enough money. And by the way, for a 14 year old, they don't care. They're going to have feelings. They're going to get mad. Oh my gosh, we're poor. Let a 14 year old say 14 year old things. There's

a reason as a society, we have all said 14 year olds can't buy beer and cigarettes and guns because they're 14. The other side of that is you need to become more comfortable with your 14-year-old being uncomfortable. Yes, that's good. Because that's life. Well, that's life. And if it's not the lunches, it's going to be the type of shoes. It's going to be the backpack.

And the phone. It keeps going. And then on into college. What college is she going to? I mean, that feeling continues. And so the greatest gift you can give a 14-year-old is not $20 a day for lunch. It is the ability to tolerate discomfort and go forward anyway yes and that's a lesson every human will learn that you

have to learn most days now adults yes call into the show saying i'm 140 000 student loan debt i'm trying to live in new york city and i want to be a painter and it doesn't work and nobody had reality conversations i read this in a parenting book i can't remember who sissy goth i can't remember who it was but they were saying that you know the generation but 10 years ago 15 years ago was the helicopter parents and now it's the snowplow parents yeah the bulldozers just like make a smooth path so there's no bumps we don't feel anything we are good no hardship no bumps in the road't feel anything. We are good. No hardship. No bumps in the road. It is just a smooth walk and everything is fine. And that's not reality.

And so teaching your kids. This is an amazing moment for your 14-year-old. And can I just say this too? Not that this matters, but they're buying lunch from local eateries. This isn't even like a cafeteria buy. This is that they're getting. Yeah. They leave campus. Yeah.

Like it's even a step beyond normal reality. Like some kids, you know what I mean? Like it's not even like, oh, we're not even gonna pay for school lunches from the cafeteria. This is like another step beyond. So I think even for her to have some level of reality, my parents did this,

of like there's tiers in life. The highest tier is that a 14 year old is getting a $20 lunch from Panera or whatever the local eatery is. The second tier is, yeah,-year-old is getting a $20 lunch from Panera or whatever the local eatery is. The second tier is, yeah, maybe you get to spend some money and buy lunch at the cafeteria. And then you got to bring your lunch. I don't know. We don't all get to live at a high level.

There's going to be ups and downs in life. So a great gift you can give your 14-year-old is let her experience that now. Yes. And let her just know that she's not alone experiencing that. Let her know, I wish I could just give you 20 bucks every day. That'd be awesome. And that's not reality. That'd be cool. Um, and just for whatever, whoever's listening, cause evidently there's at least two of us in the country dealing with this. Um, the two ways we've mitigated this in our house and you don't mitigate it. You just walk through it is a lot of the time our kids

participate in cooking the night before and so the leftovers are not just leftovers that um were shoved out in the fridge it was something that they participated in cooking the night before and they've got a steak in it right they got skin in the game or um just yesterday my son was cooking chicken nuggets or something before school in the oven and that's what he's going to put in a container to take to school so he gets to take as luxurious a lunch as he wants to but he's going to be he's going to make it and it's going to be from our what we have in the fridge yeah yeah and so that comes with planning and meal planning all that kind of stuff so all i have to say is the goal is not to have 14 year olds that

don't feel certain ways they're going to feel however they feel 16 17 18 whatever the goal is your feelings are okay and they're right and i'm going to sit with they feel, 16, 17, 18, whatever. The goal is your feelings are okay and they're right. And I'm going to sit with you while you feel that way. And then we're going to be tethered to reality. We don't have the money. We just simply don't. And by the way, if you did, I would recommend you not do that anyway. That's right. That's right. All right. Next, we have Donna in Sarasota, Florida. Hey, Donna, welcome to the show. Hi. Hello. Hello. How can we help? Hi. So my husband and I have worked really hard to be debt-free and to get our daughter through college debt-free, and we've achieved that,

and we moved to Florida to kind of slow down, enjoy our time a little bit more. We took lower-paying jobs, and we are finding that we only make just enough to cover the bills now that we're down here. And I'm wondering if we should, and I know your answer, but I'm wondering if we should take some

equity out of our house and invest it somewhere else. Questioning whether he should take early social security. How much are you guys making how much are you guys making a year? About 60,000. 60,000. Okay. And how much does it take to run your household every month? About 5,000 a month. About 5,000. Oh yeah. I mean, yeah. And how much is your mortgage? We're there. How much is your mortgage? I don't have a mortgage. Oh, oh that. Oh, okay. Um, and how old are you guys? I'm 55 and my husband's 61. How much do you guys have in retirement? Two 25. Oh, can I be the bear of bad news? I know what you're going to say.

Like y'all wanted to slow down and y'all aren't. This isn't a character issue. This isn't a dream issue. This is just a math problem. Y'all just aren't in a place where you can slow down yet. Yeah, combined, you guys can't be making 60. You guys need to be making double. Each of you need to be making 60.

And can I tell you, y'all get to feel real sad about that because y'all worked really hard to get out of debt. You worked really hard to get your daughter through school. And it's just a math problem. Yeah. And that means I would love to see y'all come up with like a number. Rachel, get it to a number and say this is what we need to work towards so that you don't feel like you're just perpetually working 70 hours a week for the rest of your life. Totally, yes.

But at the same time, we have this dream of just kind of laying back and working part-time jobs and enjoying florida and the math just doesn't work yeah where um so y'all are in sarasota i was gonna say i mean i don't know if there's a less expensive you know place that you guys want to be long term um you know you could consider that um but also i mean i I mean, I would do the math and just say, okay, for him for the next three to four years, for you, maybe the next five, what does it look like and how much we need to make to put a percentage of our income away for retirement, because you're going to want more in retirement. And that we're not feeling like we are living paycheck to paycheck. So that's going to just really be you guys sitting down and mapping out.

But then also, I mean, Sarasota, I mean, you're in an expensive part of Florida. Yeah. So, I mean, you know, whatever you could sell your house for, do you guys say, yeah, we just on a whim decided Sarasota or is our family around? Is there a reason you're there? Could there be a less expensive place? Get a condo, bank half your equity and, you know, put yourself in a different place to retire earlier.

But don't borrow against your mortgage because you're just punting a problem and you've put your house on the block as a solution to that. Don't do that. Thanks to all the guys in the booth and Kelly. Thank you, John, for a great hour. And thank you, America. This is The Ramsey Show. Live from Ramsey Solutions, it's The Ramsey Show,

where we help people build wealth, do work that they love, and create amazing relationships. I'm Rachel Cruz, hosting this hour with my good friend and best-selling author, Dr. John Deloney, and we are answering your questions. So give us a call at 888-825-5225. Your relationships, money, life. All of it.

We got an opinion on it. Anything and everything. Give us a call. We're starting off this hour with Julia in Seattle. Hi, Julia. Welcome to the show. Thank you. You are welcome.

How can we help? What's up? I'm wondering if I'm foolish to keep my house. Um, I, my, I moved, I bought this house with my husband about 18 months ago. And just a few weeks after moving in, I found out he had been having an affair for the past six months. I'm sorry. Yeah, it was horrible. I'm so sorry. Yeah, it was horrible. Oh, I'm so sorry. He declined to end that relationship and our divorce was just final a couple of months ago. And he quit claim to the house to me, but now I'm responsible for the entire payment myself and it's most of my paycheck. Yeah. You got to sell it. Okay. Can I tell you a little more?

Yeah, please. I hate this for you. I'm heartbroken for you. Um, I only need to stay in it for like five more years until my kids graduate high school. And I don't, after all of what they've been through this last year, I just don't want to make a move to. I know. New schools and all of that. I have about $500,000 in investment accounts and retirement accounts as well as a pension. And I have $125,000 in a high-yield savings account as an emergency fund. And I've always been good with money and I've saved for a rainy day. And I'm wondering, is this my rainy day? No, this is like, yeah, no, this is a wipeout. What are you bringing home a year? About $150,000.

Okay. And per month, what is hitting your account after taxes and everything? A little over $8,000. Okay. And how much is the mortgage? And then I have $2,000 of child support. Okay. So $10,000 total coming in.

Yeah. Okay. And how much is the mortgage? The mortgage is $6,000 total coming in. Yeah. Okay. And how much is the mortgage? The mortgage is $6,000. For your job. Yeah. I mean, do you see any- How much equity is in the house? Almost 50%.

We just had it valued for the divorce and it was a little over 1.6 and I owe 850 on it. So one thing you might try, and this is embarrassing because this is a largely money show and I can't think of a term, but you can call your mortgage company and, good gosh, I've lost the term, but essentially adjust your payment in light of what you owe now. Okay. And so, for instance, if you took out a $1.3 million loan and you got it down to that $800,000, they may be able to drop it

as though you have whatever it is you have left. Okay. And off the top of my head, give me a second. I'll think of the term here in a second. No, it's not refinancing. It's almost like an attribution. Talk for a second. I'll look it up real quick.

So I've got an email in my box for one second. Yeah. So yeah, Julia. I haven't had to dip into savings yet and it's been a year i'm super good at living frugally yeah but here's here's well i'm looking this up here's my big concern for you okay you're trying to limit the bomb blast that just happened in your home yeah and i want you to know like and hear from a neutral third party like what you think you're shielding them from they've already experienced

and the thing if you look five years from now ten years from now the greatest gift you could give them is a mom who found peace inside her own home not a stressed out mom who had to work overtime and skimped and didn't eat sometimes and did this and did that so they could stay in the same school yeah that makes sense are they are they in public school backcasting they are yeah recast that's what i'm sorry recast yes yes yes call your mortgage company ask about if about a recast um if that's an option it may drop your your your payment by half so call and ask them that okay um and are they in private or public they're in public school they're in public and i'm just wondering julia you know yeah if the recasting and all of that doesn't happen

is there a way because i even know within our school you know um our school district uh even to say within our elementary school which is a tiny little circle within a county but i'm like there's you know certain neighborhoods that are half the price of other neighborhoods i mean there's still like a a um there's still a cost um difference even in residential right so is is there an area where you guys? Would you say you're in the higher end of that school district? Or are there cheaper houses that you may want to move homes? Because I get that feeling as a mom, trying to keep them with a level of normalcy. Like that makes sense to me.

But it doesn't make sense to, yeah, I mean, basically drive yourself down with this payments and having nothing. I mean, you'll have $4 four thousand to live on could you that's a lot of kids and kids eat a lot and school and cleats and all kinds of everything is there other options julia within the school district housing wise um if i wanted like a condo or if i just wanted to rent for the last few years of their schooling yeah yeah how much of this julia, and this is just me asking, just between me and you and a couple million people listening, like, he took your marriage and he blew your house up. And the thing that nobody ever talks about in these moments is you lost trust in you. Because you've been asking yourself for the last 18 months, how did I not see this?

How did I not experience this? What is it about me that he got caught and he was like, nah, I'm going to go with her. How much of this is you can't have my dream house too? You took everything from me. You're not taking this house that you and I saved for that we put down on. How dare you just walk away from my house i haven't thought about that before i mean maybe a bit okay because if if that is the what tilts the teeter-totter here then that's me having a hard conversation with my friend julian saying that's ego and you i want you to have peace more than I want you to have this big fancy house.

If it's the majority, I just can't in my gut stomach disrupting my kids' lives again. Just know their lives have already been so disrupted that mom solving for peace is the primary. I'm going to solve for peace in every way I can. If that means we've got to move again, then God almighty, we got to move again. How old are the kids, Julia? They're 13 and my son just turned 18. Okay. So yeah, so it'd be the 13 year old.

Yeah. Yeah. That would feel it. But mom and a 13 year old can move to a condo. Yes. And have no upkeep and have no whatever. You get a lot of equity cash in the bank and you get to breathe. Yes. And have no upkeep and have no whatever. You get a lot of equity cash in the bank

and you get to breathe. Yeah. Yeah. I mean, I'm just being as honest as I can. If there's just me and one kid,

I wouldn't have a $1.6 million house in this much money stress. I just wouldn't. But that's easy for me to say on the side of the fence. Yeah. Call your mortgage company

and check out about a recast and see if they can drop your payment. It's not a refi, but it may help you in this situation. Thanks for the call, Julia. I'm so sorry. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on,

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NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Welcome back to The Ramsey Show. Up next, we have a Christian in Boston. Hey, Christian, welcome to the show. Oh, did it go?

Hey, Christian. Nice to meet you guys. Hey, what's up, man? Hey, Rachel just said that funny. Like, we have a Christian. We have a Catholic in Boston. We have a Christian. We have this awesome guy named Christian. What's up, dude?

Christian, welcome. So I've been a long time social media watcher, never called in. So I'm 25 from Boston. I'll give you a little background before I guess I get to my question. I'm 25. I have no debt at all. My net worth, I guess, with investments in cash sits around $133,000, depending on how the market is. And last year, I took around $125,000 home. And I want to buy a watch, a luxury watch, a Tudor. It will range probably with tax around $5,000 to $6,000. I already have a Rolex. And so I guess my question is, with my finances, no debt, nothing, what is an appropriate amount of money to spend on a luxury watch? And if so, you know, does this make sense for me as a want, not necessarily need to spend, you know, this amount of money on a watch. Yeah, I mean, I think just a couple like tactical money questions. Do you, so you got, you have no debt.

None. And you have savings and emergency fund. Yep. Okay. Yeah. How much liquid cash do you have beyond your emergency fund? Beyond my emergency fund, probably $35,000. $35,000?

Yeah, and then I have obviously $401,000, my Roth, and then my standard investment account. Yeah. What will this watch bring you? Like in your chest? If you have your fist in your chest, what will this watch bring you? I don't know.

I kind of appreciate i guess the craftsmanship it's a nice watch it looks cool it doesn't do anything different than my phone you know flipping it over sure um it's more or less just kind of like a want you know it's not like i'm buying it for some sort of you know to commemorate something you know i turned 26 this month like if you really want to call it, I'm buying it for something. I'm getting kicked off my parents' life insurance. Like, that's what I'm buying.

Right, right. Yeah. I would guess this. So, Rachel, tell me, Rachel is better at this than me. I have bought guitars that are really expensive that I thought were going to fill a hole in my heart, and they didn't.

I love them. And I told people like, no, no, no, they have a kind of tone or they put, I needed this guitar to make myself feel better. So there was that. I'll also tell you just as a 25 year old and I'm in my 40s,

the single greatest flex I've ever seen when it comes to watches was doing an event with Jocko. And dude rolls up with a Timex. And we were talking about his watch and the way he said it, and you know Jocko from the internet.

But the way he said it tells the same time that everybody else, other watch tells. I just remember thinking like, you're the baddest dude I've ever met. Not to mention he's Jockoaco but it was a it's almost a flex not to have it kind of thing yeah i remember just and i guess that would be my warning to you as a 25 year old is if you want nice things and you got cash and you're like whatever whatever yes yeah you can afford it fine the thing is is i think sometimes i remember being 25 i remember being 35 and thinking i needed a pair

of jeans i needed a car that said i need shoes that said x y and z and now that i'm older and i've hired a bunch of people in my life and i'm meeting people all over the country i was actually completely opposite wrong the eyebrow gets raised when somebody walks into somewhere nice and they've got jeans on because you think oh that guy knows something i don't know or when they pull out their timex and you know they're worth millions and millions of dollars you end up going uh that's kind of awesome actually right and so but but you i think cash to cash you can afford it it's a nice thing totally and i think what john's saying the sentiment of stuff is always just like just i think it's an awareness within you christian and i do the same i mean like i mean i think there's just something to be said of when I want something, asking the questions, you know, if nobody sees this, do I still want it?

How much of my motivation is for other people? How much of it is for my own ego to feel something? And even from a joy perspective, Arthur Brooks talks about this, that we can do five things with money. We can give it, save it, buy our time back, buy experiences with people we love, love and buy stuff and the one thing that does not bring lasting joy is stuff so again this whole kind of concept of i'm buying this watch because i love it because i have like i bought a purse for my birthday um last year and it was a nice purse and it was like okay think like whatever car you drive that nice of a person like no no do not no not that nice there are levels of purses there's not that kind of purse but but it wasn't from target and so it was just this idea of like okay if i

have this purse if i don't have this purse what does rachel say about herself how is she feeling when she walks in a room like there's just a lot of introspectness i would have for myself the higher dollar amount you spend on something i think the more is just kind of good to explore some of that and maybe it's more of a um you know you can buy it and you're totally fine if you buy we are not against stuff go get some nice stuff christian you have set yourself up very well you make great money you don't have debt you've lived below your means like you are doing great you can buy this watch i just don't john and i think our biggest caution with stuff is don't be under the illusion that it's going to fulfill you long-term and that it's

going to bring some level of satisfaction because the way that things are marketed to us and the belief in that and what we wear, I mean, it is crazy the status symbols that are out there and what we believe and the thing is people get in trouble with that. So again, I'm not worried about you from a money perspective at all. I think you could probably buy two of these and you would be fine, but it's more about you long-term and who you are. Christian, you should ask John and Rachel, what kind of watches and how much did they pay for theirs that we currently have? Huh?

I don't know what you guys got on. Oh, okay. Christian, I've got an Amazon watch for $15. John, what kind of watch do you have? This is such a flip of the script, which I love. I've got this dope Garmin watch. I love Garmin watches. It's a free ad for Garmin.

They're the best. I love them. While we're on this topic, Rachel, tell us about how much your car that you rolled into the parking lot costs. Because mine costs $4,000. You? Anyways, Christian. So here's the thing, Christian.

We love nice stuff. I'll also say this. If at 25, you can wrap your head around this idea because you have chosen to live the way you live you have the opportunity and I didn't find this out until I was old you can buy it once really nice

if you buy it with cash if you buy a super nice pair of Wolverine thousand mile boots you can resole them and you can take care of them and you can give them to your grandkids, but they're really expensive out of the gate. Right. And so if you say, I want to buy a couple of really nice watches, I love them. I'm kind of a watch guy and that's cool and awesome. And no, this will fill no gap in my soul. I won't feel any better about myself. In fact, I'll feel a little bit weird. Um, cause I'm gonna see somebody who needs

money to the net following day or whatever. Um, I know some people little bit weird because I'm going to see somebody who needs money the following day or whatever. I know some people who have a rule that if they buy something really nice, they give that amount away or a percentage of that amount away just to balance their own soul out, whatever. But I love the idea of buying once and letting that just be that. I'm going to buy a nice i don't go ahead i don't mean to extend this conversation like the question of it but is there like a rule or a percentage of a net worth that you'd be you know like a percentage of my net worth that i could spend on a want that wouldn't necessarily obviously break the bank but it's like you're comfortable with just blowing i love dave saying like if you can light it on fire if you could take that pile of cash that if you can take five thousand bucks set it on fire on your kitchen table and watch it burn

to ash and you're okay and you're okay it won't it won't it doesn't affect your world yeah yeah yeah that's it i mean there's not really this like percentage i mean we say things like with cars like we always say like things with motors and wheels right cars campers all that yeah depreciating asset yeah no more than 50 of your annual income like there's some things around that but when you get to the point where you are yeah of um i mean yeah you're you're beyond baby step three and you just have extra cash that you want to spend so it just you emotionally have to detach from that money and if you can really do that and it doesn't keep you up at night then you're good to go well and you could be pathological i would love for you to also like get a nice watch dude

um you sound like you got a level head man get a nice watch dude um you sound like you got a level head man get a nice watch and also start laying the groundwork to get your money out of crypto whatever nonsense you have it in and buy yourself a house that nobody can ever take from you right some of those more stable yeah um assets that you can anchor into yeah and into you know a well-balanced and you're learning this early, Christian. Honestly, this is stuff that it's so good to have because where you are financially. Always remember with money that you can

spend it, you can save it, you can give it. We say on the show, we are fans of all three. As you continue to become more successful and continue to live below your means, you're going to continue to build wealth. You're going to have more and more savings. You're going to have the opportunity to spend some more, but also be having that generosity muscle as well, because that is joy within money. And if you can get that early

and live with it, there's a freedom and a joy there that's unbelievable. So giving, saving, spending, doing all three. All right, Christian, have fun with your new watch. This is The Ramsey Show. Welcome back to The Ramsey Show. So the best way to take control of your money, make the most of your money, is to do a monthly budget, to know and have a plan on where your income's going. And EveryDollar makes this easy. It makes you have this, honestly, very intuitive way of how you plan your spending, how you track your spending, what you're saving for, your giving goals. I mean, everything is in EveryDollar. It really takes your income and walks you through how to have a plan for it and know where it's going. So you can download EveryDollar for free in the App Store or Google Play, or you can click the link in the description if you're listening on YouTube or podcast.

Up next, we have Dave in Springfield. Hey, Dave. Welcome to the show. Hi. Thank you guys for taking my call. Absolutely. How can we help? So I'm 21. I'm about to be out of college this year. I have no debt. I paid it off as I went. But my girlfriend didn't, and she's going to have about $70,000. And every time I bring it up, she's just kind of dismissive about it,

and I don't really want to pay off her her debt in a way you know what I mean and I'm just not sure how to go about this in the future you should just break up with her dude John I'm serious I mean it's I mean because here's the thing you're both going to bring crap into this relationship both of you and some of it you'll know right away like $70,000 in debt and if you're already thinking that's hers and like she's bringing this into this and i don't want any part of it like that's just a down the road you're going to run into oh i want to raise kids like this but this is my how my dad did it or i don't want to live in this neighborhood or this house like you're just like if that's the if that's your first impulse is what about me then you're not ready to get married yet if she has 70 000 i understand that does that make sense so if she has 70 000 of debt and you're like dude

i don't care what mountain i have to move you're gonna be like i want you to be my wife and i want to build a life with you like hell or high water you and i are paying this stuff off together then awesome you're off to the races we would never tell you don't get married because the student loan debt so when i say when i say just break up with her does that give you peace or does that make you mad um a little bit though it's like me and her have been together a while it's not that I don't want

to pay it off together is it more because of her attitude I was more than happy yes it's more of like she has no like she doesn't want to pay it

it seems like she wants me to pay it it's kind of like what I'm getting at okay what's beneath that where else does that show up in your relationship honestly nowhere like she I'm getting at. Okay. What's beneath that? Where else does that show up in your relationship? Honestly, nowhere.

Like she, I mean, she's a little unmotivated. Like she doesn't really, isn't really that ambitious. Like post college, she doesn't really want to do, she just kind of wants to do her thing, like live around the area and whatever. And I kind of been like, I did an internship like in another city and I've been like, you know, exploring career opportunities. Um, but she's kind of seems like stuck where she is and I just like, I like like her a lot and I want to be with her,

but it's just like such a weird thing. I think y'all should explore that conversation. Yeah. It's just like, I try to go further, but she's just like not interested in like continuing that conversation. You know what I mean? Beyond the money, though, Dave, like, hey, this is these are kind of this is kind of what I value in life. This is what gives me energy. This is how I'm wired and what I'm excited about and trying new things and opportunities.

And it feels like, you know, you're more just, you know, I don't know. I don't know if that kind of life long term is something that you want to you know be a part of um so i think it's i think it's more of that conversation because what that leads to is her motivation around any i mean anything in life right money career um kids yeah cleanliness how does the house look where do we live and here's what I'm here's the like if you ask me what my big fear for you all right now is and I'm not judging you for this I'm just calling it out there's already a piece of you that feels like well I'm doing this and you're not doing that or to put it in a nerd

terms you're already in the scorekeeping world. Yeah, I can understand that. I just like, when I look at like both of our situations, like I think of everything I've done to get to where I am now, I've worked so hard to be debt free right now. And she just kind of like took the shortcut and it feels like, I don't know, it just feels weird for me. But here's the question. You're asking her to go back in time and sign up for values that you had before y'all started dating, and that's not fair. I hear that about sex. I hear that about money. I hear that about debt, about, well, I did all this stuff, and we just met, and now we're doing this, and I don't feel like they... They didn't sign up for that set of values the question is will she agree to live a

debt-free life moving forward with you because you say that's the way i feel like our family will be the most safe moving into the 21st century and if she says eh i don't care now you'll have a values issue and you're it's less about do you have the same beliefs me and my wife have way different beliefs on all kind of stuff but one of our core values is if one of us raises a flag and says this is a huge deal to me the other person says well i don't give a crap i'm in i'm in and so if you're honest and say this really is important to me that we commit before we get married i never want this family to be owned by a bank by a car dealership by whatever and she's like oh i, I'm going to have a Tahoe. Then just know that y'all are going to have problems.

Like insurmountable problems because they're value problems. Yeah, definitely. Does that make sense? I hate to be the bearer of bad news, man. I feel like I just ruined your afternoon. I understand, man. But I want you to also be very careful because you're not better than her. You just took a different... Yeah, I'm not saying that I know I know but that frustration

builds up and that's how it comes out yeah I've done all this and you haven't done anything so it's kind of like can we agree on values but almost always those values conversations start with you sitting down saying I'm scared about

X, Y, and z it's important to me that our family never be owned by somebody are you in on that that means we're gonna have to sacrifice here we're gonna have to work really hard for two years after we get married to pay off your debts and that means you're gonna have to get a full-time job all those kind of things but it starts with you saying what you really feel what do you think rachel yeah no that's what i was gonna say i mean this is like kind of a classic example, what we say on the show. A lot of people call in about a money issue. You know, she has student loan debt. I don't know if I want to marry her. And it's not as much about the student loan debt. It's more about the values

around the relationship. And because when we have people that call here all the time, like, yeah, my wife has, you know, $80,000 in student loan debt. You know, I brought some credit card debt in and we're working to pay it off together. I mean, like it's a team effort there. And as you get into marriage, the less of a team you are and see each other as one and you're on each other's side, both of you, right? She's jumping into your boat, you're jumping into her. I mean, it's just this idea of like,

you guys value the same thing together. It's not that life is necessarily easier, but there is a level of um smoothness with that i'm like you're not running up against barriers constantly because of what you're desiring versus what she's desiring yeah the world will give you enough resistance yes you you can't be fighting your partner while you're also trying to take on the world it has to be you y'all to verse the world yep. Otherwise it just gets sideways really quick. Yep.

So, and it sounds like you guys have been dating a while. Dave is what you said. And you guys are still young. And so maybe you started dating at 16 and you're a different person at 16 than 21. I mean, that's. It's heartbreaking,

but it is. Rachel, like, man, on, on my show, on the other show that I, I,

I'm a part of, i get this all the time i chose to not drink in high school and college and this person did and so now right and i always want people to go back and say you can't judge somebody on some on values they didn't have before you met them right the question is can we unite right now? Yes. And if you can't get over that, then you can't bring, you're bringing baggage to the relationship. Right, right.

And I think it's always a balance in marriage too and in relationships is that, you know, we always say opposites attract, right? It's like the old saying. And it is true. You're both going to have different levels of passion about different things. So it's not about becoming this like one individual person when you get married,

you still are two individual people. But you're in the same boat. But that's it. Like it's like, but we're still moving in the exact same direction, right? Winston's still going to have 18 Excel sheets with stuff, you know,

out till we're 65 and I'm not going to know how to work them. Like that will always be the case, but we are still working towards the same goals. And so the way we go about those things is different. And our interests are different in life, but it doesn't, yeah, it doesn't conflict with the values of our home and how our family unit is being driven. And that's where it gets sticky. And that's a red flag early, Dave.

I mean, it's something to at least talk about. And I'll give you guys this, not to like, I don't want to belittle you cause you're young, but I'm like, y'all are still figuring this out. She's still figuring this out, you know? Um, so have that conversation with her, but I would not break up with her because of the student loan debt. I would very much possibly break up if you guys cannot get to a set of values. Um, and I would not take a step into engagement until those are consistent. This is The Ramsey Show. Welcome back. Up next, we have Jessica in Los Angeles.

Hey, Jessica. Welcome to the show. Hi, how are you? We're doing well. How can we help? So I'm just wondering how to go about applying the baby steps where my largest debt is a is to my grandmother who has helped us yeah um all right tell us um yeah how much how much you owe her six thousand dollars now six thousand yeah and that is from a credit card that she co-signed with my fiance so he could start his own business.

Oh, wow. What a nice grandma. I'm telling you. Okay, and so what's your other debt? In total, we are $10,344 in debt. Okay. That's including our property taxes, our utilities, and our $2,200 in other credit card debt. Are you behind on your utilities and property taxes? Yes.

So the thing is, my grandmother is pretty persistent in reminding us about the credit card debt. So we kind of, for example, his last check was $4,500. We gave her $2,000 to try to bring that debt down. But the issue with that is then we rely on that credit card because he's on the road for weeks at a time. Hey, Jessica, are you able to talk into your phone a little bit more? We're trying to get it clear. Oh, sorry. I'm a little bit nervous.

Oh, no, you're fine. You're fine. Okay, so, yeah, so she's persistent. She's wanting her payment. She's, she wants her 6,000. How much do you guys make a year? So he's been doing this business on his own for six months now. In the six months he's made about $60,000. Okay. And how okay and how much how much do you make um i don't work at the moment um i am we're going through a new life transition we're um newly sober and i'm trying to get our house back into a livable condition basically we've only been sober for 40 days but um you know we just kind of our whole life is chaos and getting it over, we're trying to figure out how to be like functioning adults, you know, priorities and learning how to be, you know, normal, I guess.

Well, let me tell you this, Jessica. Um, number one, I'm super, super proud of you. Congratulations. Thank you. That's awesome. Um, the second thing is, is, and I know you've probably heard this over and over and over in your meetings, but you have to, have to, have to, have to, have to go get a job ASAP. It doesn't have to be a full-time job and it for sure is not going to be your dream job

or your passion job or whatever. But think of it this way. If you think of alcohol, like yourself chained to a bottle, you've been unchained for 40 days, but grandma calling you, the government calling you, your utilities possibly going to get cut off. That's like a squat rack. It's like you're sitting under a squat rack and you got a squat bar on your back. And so now you're unchained, but you still can't run free. And so what I'm telling you is if you go get a job, even working 20 hours, you clock in, you clock out, and you're baby stepping your way into full-time employment, getting your feet underneath you, you're 40 days sober.

You're still, I mean, your legs are still wobbly, and I get it. Every minute you're making a choice to do the next right thing. If you go get a job working 15 hours a week, 20 hours a week, and you can contribute to this thing, it will be like putting, it will be like jet fuel to your life change. I mean, Jessica, if you could make three grand a month, you guys could be completely debt-free in three months. In three months. I mean, with his income, everything.

So I would tell grandma, okay, our goal, grandma, is it's February, March, April. Our goal is by the end of May, by the end of May, you will be paid. But we first have to take care of these back property taxes. Yes. Because the government's right there. We're going to pay those off this month, grandma. I mean, you could even show her your, you know, you guys make a timetable and say how

many hours do I have to work? I would give her a payment schedule. Because my guess is grandma's calling because y'all have had challenges inall have had challenges in the past and she's worried accountable she wants to make sure she gets her money back so you and husband make a map here's a 12 month payment schedule we're going to pay you this much 250 bucks every month or whatever it is and then you will be paid off by this date she's not hassling you she can check it off every month but like rachel said you can't keep robbing p Peter to pay Paul. They're going to cut your lights off. They're going to take your house away.

Yep. So I know grandma's hassling you and as she should be, and she's frustrated, but you can't let him take your home. Yeah. Right. So let's get a payment schedule and give it to her. Yeah. And have a goal of you guys live on his income and Jessica, you bring home two to three grand

a month. You know, you could do that with some part-time jobs. We're talking fast food. We're talking just clock in. For sure. We'll go work at Target. Go Uber. Like do something that really allows you to just earn some extra income. I mean, even if it's, you know, $25, $20 an hour. Yes, you need some little wins. And I'm telling you, it'll be so transformative. I'm so excited for you. Good job, Jessica. I hope that helps. Up next, we have Sharone in

Cleveland. Hi, welcome to the show. Hi, thank you for having me, Jessica. I hope that helps. Up next, we have Sharone in Cleveland. Hi, welcome to the show. Hi, thank you for having me, guys. You're so welcome. How can we help? So I have a kid going off to college next year, and I am in a ton of debt. I have not made good financial choices or money choices. I've never learned how to be totally honest. Um, but that's not an excuse. I just don't, I just haven't made the good choices. And so it was recommended to me to file bankruptcy. Um, and I just need to know if that's even like a wise thing to do. I have, um, a lot of credit card debt. Okay. Walk me through your debts real quick. How much debt? Okay. so I have student loans.

I know that bankruptcy doesn't take care of those. So I have over $100,000 in student loans, I believe. Is that like right at $100,000 or like $120,000? I think it's about $125,000. $125,000 in student loans. Okay, keep going. I have about $20,000 in credit card debt. Okay.

I just had to buy a new car because my old car clunked out on me. That one was paid off. So now I have a car loan. How much is the car? I'm at $26,000 is what I owe my car. Okay. And then I have two civil suits from credit card companies. Okay. And how much are those? One is $9,000 and the other is $6,000. Okay. And how much do you make a year? I make $30,000 a year. I work in ministry for my church.

Oh, you can't do that anymore. Sharon, I'm so sorry. I know. You have to let them know that you love them. But, yeah, you can't breathe, hon. I can't. I know. Yeah. Yeah. And know you you want to do this ministry and i know you do good work for people but um you got to take care of your family and you've dug yourself a pretty big hole but and you got to go get it what's your degree in i have a

communications degree and a master's in education. Okay. What would you, if you weren't doing what you're doing now, what's like probably the most realistic next step career-wise for you, do you think? Probably going back into the school system. Okay. And how much would starting out be if you started as a teacher? Probably about 45, between 40 and 45. Okay. Okay. So that would be my next step. I would go talk to them tomorrow. I mean, I hate to say it, math. That's a 50% raise, let me put it that way. And 45 is not enough, but that's a 50% raise.

Yeah. And I think too, nonprofit ministry work, all of that. I mean, we are big fans of people in those worlds and, and maybe eventually that's your goal to get back there. Right. I mean, if you could imagine having no payments, having an emergency fund, having a great retirement set up and you're like, you know, I can, I can go back to, to 35 because I have everything set up, right. That would be a goal for you, which I think is amazing. But for right now, reality, it would be that. So what I would do is your car, I would sell it. I would sell your car tomorrow. Sell it because I mean, it's basically how much you make in a year. And I would go get a $5,000 car. If you can get a difference, I wonder how much, have you, Kelly Blue Book did it all?

I know you just bought it, but have you seen if you could, have you looked up if you could sell it? No, I haven't, but I will. Okay. Even if you have to take $5,000 down to the credit union and you're upside down on it,

I'd rather you do that because then you own the $10,000, you're going to take a $5,000 loan out, pay the difference off because you're upside down, and take out a $5,000 loan to buy a car. Was it a brand new car or was it used when you bought it? No, it was brand new. It was brand new. Okay. So you'll probably take, yeah, you'll take a hit. So hopefully you could still get maybe like, you could maybe sell it for $21,000, $22,000. You'll take a little bit of a smaller loan for a difference that gets you a $4,000 car. And that'll at least free up that car payment. But no, do not, do not, do not file bankruptcy.

You're not there yet. Hang on the line. We'll hook you up with Financial Peace University and the EveryDollar Premium app for free and give you the education that you're missing. But do not file bankruptcy. You're not there yet. This is The Ramsey Show. Live from Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz, hosting at this hour with bestselling author, my good friend, Dr. John Deloney.

And we are answering your questions. Relationships, money, life. So give us a call at 888-825-5225. And thanks for listening. If you're listening on radio, if you're listening in the app, we are here for you this hour. Yeah, we're on the Ramsey app. For this hour.

Where James Childs gets off the rails. Oh, okay. We're going to go to another John. We got John in Salt Lake City kicking off this hour for us. Hey, John. What's up, dude? Hey, how's it going? Excellent.

What's up? So I'm running a small business. I mean, hoping that it will grow bigger, but it's going pretty good. I moved a little over two years to Salt Lake City, and now I got into a little situation that I'm trying to figure out. So I have some money that I owe in cash just to my brother. I have some tax that I wasn't able to pay for 2023 yet. I filed it super late.

Again, it caused some delays because I moved. Um, I have some personal debt. Again, I was kind of done with my credit card when I was younger and now I'm renting. I'm in my business is going pretty successful. I should say, uh, right now I'm in a situation where I, I'm trying to get myself a house, uh house to get out of the rent and stop just throwing money out of my pocket just for the rent. But what I'm stuck with is that should I first focus on paying off my debt and then consider moving? Or should I move, possibly by any type of personal residency, and then get back to my debt.

The first, pay off your debt first and then buy a home because you're, you know, essentially, do you have any money saved for a down payment? No. Okay. So you're broke. I mean, John, you don't have money to buy a house. So listen, renting, I know it can feel like it's throwing money away, but what it's doing, it's buying time for you because being a homeowner in and of itself is expensive. I'm like, there's so much that can go wrong with a house and does go wrong with a house that you need money to fix, and that would cause you to go deeper into debt. So you're not in a position financially to own a home.

Okay, so walk me through. How much do you owe the IRS for taxes in 2023? It was $4,300. $4,300, okay. And then how much is on the credit cards? So I have $1,500, $5,000, and $3,900. $1,500, $5,000, and $3,900. Okay.

So all total there's one more that was closed and they just asked me to pay it off slowly so in total in credit cards I have $19,000 $19,000 in total so is the other one $10,000 who's telling you to pay it slowly

what's that? Yeah I've never heard a credit card company in human history say that no no they're just asking for not slowly maybe I said it wrong Slowly. What's that? Yeah. I've never heard a credit card company in human history say that. No, no. They're just asking for it. Not slowly. Maybe I said it wrong. They asked me to just pay my minimum payments at least. I bet they did.

It was a credit card for my business that was shut down because I couldn't keep up with the payments. Okay. So that's all the credit card debt. IRS debt. What's the other debt you have? So I have cars. I have a lease on the car. I got a car for lease.

I try to break the lease and return it. It costs too much money right now, so I'm stuck with that. I have my work vehicle that I owe $35,000 on, and then I also in cash it's $20,000. You have cash of $20,000? No, no, no. I borrowed cash. Oh, you have $20,000 left on the loan.

Yes. Well, you lease a personal car, and then you bought a $35,000 business car? Yes. So it was, I opened my business. bought a $35,000 business car? Yes. So it was, I opened my business. I bought myself a car, like a truck. That was nice of you. You're a great business owner to yourself.

What's this business? I do construction. Okay. How much are you planning on making this year? Well, I'm planning to go over half a million. My last year, I closed on revenue. Is that gross or net? Yeah. What's your net? That's gross. Oh, my net, that's something I'm trying to figure out because I just take, I don't have fixed net. I just take whatever's extra after the payroll and whatever. What did you make last year, John, on it? What did you bring home?

$100,000. $100,000. $100,000 and three, yes. Okay. And did you pay $35,000, $36,000 in taxes? No, I didn't file the taxes yet. I mean, I guess it will be there. Yeah. So you're going to owe $35,000 in taxes on top of this debt that you have too? Sounds like it. Yeah.

Okay. I need you to hear me. I'm good right now. Hear me and Rachel loud and clear. You're in a big mess, dude. And you're a couple of steps away from going off the edge you're gonna have to get radical and if i'm being totally honest i don't think you're gonna do it but dude you have a successful business you're you make too much money and you work too hard juggling too many projects to be hemorrhaging like you are right now financially like you're broke broke broke broke broke broke you broke, broke, broke. You get what I'm saying?

And I'm saying that because I love you, dude, not because I'm not talking at you. I'm talking with you. I'm scared for you is what I'm saying. Sure, I get it. I'm roughly getting in gross, like stable $60,000 a month. Yeah, but none of that matters.

What matters is your net you know what i mean do you have anyone do you have anyone on your payroll um it's all 1099 okay so all contractors and then are you are you are you getting paid from one job to finish the next job are you one of those um gcs that just takes cash from one and pays off the other one? No, I've been on the job and then once it's done, I get paid. Or if it's a big job, then they do partial things, like whatever the drive is. Okay, but when you get a payment for the driveway on one house, you're not taking that to pay for the fence that you just bought on the other house, are you? Yes, that's correct.

Yes, that's what you do? Or yes, that's correct you do or yes that's correct you don't do that i don't do that yeah okay yeah i mean john um yeah the reality is the the taxes are going to come first so owing the irs is something that we bump up what we call the debt snowball where you pay off your smallest debt first irs automatically goes to the front and so yeah you're going to be filing your taxes soon and you'll have to probably get an extension. I mean, you're not gonna be able unless you can come up with $35,000 between now and April in the next two months. So know that that's coming. And so I mean, I would be doing your full time job as much as you can taking on other projects, that's probably gonna be more profit for you than like going and taking

a side hustle. But if you're if it feels like too much, and you're like, no, it's more mindless to go and Instacart like, do that at night, you have to you have to get this income continuing to go up. And then you have to stop spending money, I would be selling your car. If I were you. I know you said that you couldn't get out of the lease, but I would go back and run those numbers and see. I guess you'd have to have money for the buyout of the lease, but working your way, there's a couple of ways to get out of it. I would be seeing if I, any way to finagle to get out of the lease, I would sell the truck, get a beater. That at least relieves some of this. And then all these ankle biter credit cards,

I'd cut up your credit cards tonight. Again, your next goal is to work to get this IRS debt paid off and then tackle these credit cards. But you have a good probably two years, John, of really buckling down and saying, okay, I have to be focused on this. And remember for next year to be setting aside 30-ish percent of your income,

probably where you are tax bracket wise for taxes. This is The Ramsey Show. Welcome back to The Ramsey Show. Taking your calls. Up next, we have Keri in Fairbanks, Arkansas. Hi, Keri. Hello. Alaska.

You know, we just talked about this at lunch, Keri. Wow, Fairbanks, Carrie. Hello. Alaska. You know, we just talked about this at lunch, Carrie. Wow, Fairbanks, Arkansas. You're not going to believe this, Carrie, but Rachel also is a geography professor. If George Campbell hears this, Carrie, I will never hear the end of it because we were laughing about states, especially like the M's, Mississippi, Missouri, Michigan. We're talking about Arkansas, Alabama. And Rachel and George often get together and laugh about the times tables. They're so hard.

Fairbanks, Arkansas. It's AR. I know. I know this. I'm so sorry, Carrie. Gosh. How's the weather down there in Arkansas? Go raise your backs.

So what's up, Carrie? I'm sure they're having better weather than we are. Oh, no. All right. How can we help you, Carrie? We know how I need help, but can we help you? Well, I just have some questions. I need some advice.

Please hope they're not map questions or they're not like states questions. I wish it was that simple. Okay, let them rip. What's up? About three and a half years ago, my ex-husband was diagnosed with cancer. And it was such a rare form of cancer. Only about 200 a year get diagnosed in the U.S. Oh, man. So no one in Alaska would touch him.

It meant we did all of the treatments out of state. And, in fact, there was only two hospitals in the U.S. that would treat this cancer. One was in Florida. One was in Minnesota. And we chose the Minnesota hospital because we have family in the area. I moved him in with me because we had our son who was 16 at the time, and I told him, you're not dying. We're taking that off the table.

You're not leaving me alone with a 16-year-old. We are getting through this, and I'm very happy to say that today he is 100% cancer-free. Oh, wow. He beat it, beat the odds, and, well, we are dealing with, of course, the financial aftermath of the situation and that's why i'm calling you we fortunately he had very good health insurance um he had six surgeries at about a

hundred thousand a piece and um we had things like just the airfare alone was eighteen thousand dollars to fly out during this period of time. That's all in. So now we're facing, we have all in all, about $140,000 in debt. And that's living expenses, just like trying to do life alongside these treatments, and insurance won't cover those? That's why we have about $104,000 in debt. Really, I had about $40,000 that I just spent during that period of time that was for that mortgage, et cetera. Utilities are very, very expensive in Alaska. My heating bill alone is $500 a month.

Sure. So it's very expensive up here. And he has a very good job. But, of course, it was a hiatus for both of us working during that period of time because you can't work and fly out and be in another state, back and forth, back and forth. But I feel very, very, very fortunate that, you know, there was no situation of no bankruptcy. No, I didn't.

Sure. No losing your home. No thing like that. I just want to get this straight though, Carrie, real quick. Did you say 104 or 140? Right around 140. Right around 140. Okay.

And that's mostly on credit cards or medical as well? No, it's not. There are some of it's credit cards. There are a couple of loans. Like a personal loan? Yes. We've taken out during that period of time. We've taken out a $65,000 loan.

Okay. I want to separate. I'm curious. What is under your name? Yeah, that's a sticky question. Let's see. Because y'all are still not married, right? No, no, we're not married.

Okay. We've been divorced about, oh gosh, 12 years. So the $65,000 on credit card debt for me. I'm not exactly sure of his credit card debt. Okay. Are you all back to living in separate places, moving on with your lives separately? No. No, no.

He still lives with me. I'm actually looking at taking our son's now 18 and looking. He's just about that age where he's going to become an electrical. Is he the ex-husband? Is he working right now? Oh, yes. Okay. How much is he making? He does close to about $150,000 a year.

Okay. And then how much are you making? So my situation is a little different. I am a hairdresser who had worked for myself. So obviously when I was caretaking him, I lost my clientele. So how much are you making now? I'm now rebuilding my clientele. So how much are you making now? I'm now rebuilding my clientele so my income is very low.

Are you depending on his income to live, Carrie, to pay the heat and everything for the house? Fortunately I own a duplex so I bought this actually as an investment property for myself and I kept this property after the divorce.

So my rental income pays the mortgage. And yes, he lives with me, so he pays the utilities. Okay. Are you able to self-support yourself right now if you were to move out tomorrow? Yes. Okay. So why hasn't he moved out? If he's cancer-free, he's making $150,000 a year, why is he still there?

Just the teamwork. We're very good friends. We just married very young and different goals in life. But we get along very well, so we cohabitate well. So what's the question? How can we help? Pay off our debt as a team. What I'm looking for is, I'm looking for advice on what direction, what steps would you take if you had, if you're in my situation? Because I keep running into roadblocks. I was looking at like loans against his life insurance and he's too young. Yeah, don't do any of that stuff. listen listen there's a there's a you went through a scary situation and y'all went through like a life or death thing you got to find out

what you're really made of and you're one of those um one of those rare people that's just an astounding human being like you sat when you sat next to a hurting person for three years somebody that for it may have broken your heart right so here is john and rachel neutral third party never met you here's what i see i see a woman who gave up everything for her ex-husband and you are incredibly exposed right now well he's a good person i have i know i know i know but but you gotta understand me and rachel would not have a job, Dave Ramsey wouldn't have a job, if everybody who, quote-unquote, thought the other person was a good person was actually a good person. And it's just until he meets somebody or until he gets fired or until the next whatever comes up.

And I know that y'all have been through hell and back and all that kind of stuff. But here, I just see, if you were my sister, if you were my daughter, I would be terrified for you because you are 1,000% exposed. Right. And so I would not – don't borrow you. Let's pretend – I'm going to pretend y'all are married because y'all are playing house in here. So I'm going to pretend you're married.

Y'all have to sit down and get on a laser-thin budget, and you're going to have to cut hair on the side and go get a real job. And I say real job, like a day-to-day job. Cutting hair is very much a real job. I said that wrong, but like a clock in clock out job and build your clientele in the mornings and at night and on the weekends, because y'all are, you're, you are incredibly exposed right now. And he is one tick away from yet another health scare. You know all the fragility of everything, but here's the deal. Y'all just need to plow through this $140,000.

If you're making $50,000, he's making $150,000. You're done with this in two years if y'all just decide to be. That's kind of what I estimated also. So, I mean, there's not another way except for y all to go to war again for showing to war against cancer. And now you're going to go to war against this debt. Yeah, and I would advise you, Carrie, to start working on your debts that are in your name first. Absolutely. Because of just...

No, no, no. I would advise to do the joint debts first. To go ahead and get it out. Well, I mean, with the debt snowball, I'm like, him list out credit cards, you list out your credit cards. Knock those out. And then you guys tackle the big debts first. To go ahead and get it out. Well, I mean, with the debt snowball, I'm like, him list out credit cards, you list out your credit cards, knock those out, and then you guys tackle the big one together.

Because either way, you're both, both names are on it. So you're both going to be liable on it. Yep, yeah. But Carrie, and for you,

I'm like, I don't know, to move on and not to have this, it's not that he's packaged, but to have your ex-husband living with you, like for you to start a life too, I think he's packaged, but to have your ex-husband living with you, like for you to start a life too, I think is important to start thinking about.

This is The Ramsey Show. One of the best things that you can do for your money is to have a great tax pro in your corner that you trust because they really help you navigate the best moves for your situation when it comes to if you have a small business, if you've had a lot of life changes in your corner that you trust because they really help you navigate the best moves for your situation when it comes to if you have a small business, if you've had a lot of life changes this year and taxes are coming up, you guys. So make sure you get a great TaxPro in your corner.

You can go to ramseysolutions.com slash TaxPro to find CPAs and enrolled agents that have been vetted by the Ramsey team. So if you do need help with someone, you need someone to sit down with you, talk to you, even over the internet to be able to say, hey, what do I need to do here with my situation? Make sure to check them out at ramseysolutions.com slash taxpro. Up next, we have Andrew in Denver, Colorado. I was going to make a joke about the state, but see, Connecticut, but Colorado. No,

it's Colorado. Hi, Andrew. Welcome to the show. Thank you. Hello. Hello. Thanks for taking my call. Absolutely. How can we help? Yeah. So right now I'm in a bit of a, I would say a unique situation. So I'm 30 years old. I have, I'm married. I have one kid. I currently have have no debt but I am going to be going on a full-time commission in March and just don't want to squander any any time or any you know I don't want to squander the position I'm in right now kind of want to make the smartest financial moves and kind of where to start to build wealth for my family. So that's where I'm at.

All right, that's great. Okay, so no debts. Do you guys have any money saved just that's liquid for like an emergency fund? Yeah, we have like $1,500 right now in savings. Okay. How much are you expected to make? How much do you think you're going to make? It ranges. So I can make anywhere from $3,500 a month to some really good months.

I can make $8,000 to $9,000. So it definitely, there's a wide range. Yeah, for sure. Okay. So when you're, cause you've not been on full-time commission, is that right? This is like the first month we're feeling it. Okay. And have you been in this job previously and did you sell enough that got you to this point or did you change jobs? No. So yeah, I've been in sales, this position and outside sales for about a year. Um, but previously before that, I've always been on salary or an hourly pay. So this is my first full-time commission gig, but how my company works after your first year coming up in March, they, they pull a plug, they take you off, off salary. Oh, gotcha. And then your full-time commission. Okay. That's great.

Um, okay. So a couple of things that I would be thinking about, um, have you guys run a household budget to know what you need to cut, how much money you need every single month to cover things like rent or mortgage, water, electricity, everything? Yeah. Um, yeah. So it's the rent's like $2,200 and everything, gas, groceries, phone bill, all that stuff, it's probably $3,000, maybe a little more than $3,000. Okay, so you guys probably need $5,200, $5,500 a month. To live, yes. To live, yes, comfortably, yes, okay. So what I would do is I would have my primary checking.

I would have another account, probably like a high-yield savings account. And if you can split it into two accounts, I would do this. I would keep one as an emergency fund savings and one fund, what I would call like the peaks and valleys. Because with what you're going to experience is, again, you're going to go from $3,500 to $8,000 to $5,500 to $3,000 to $9,000, right? I mean, it could be all over the map. And so I would, if I were you guys, especially probably for the first six months, I would be as consistent on that $5,200 number that runs your household. And if you make more than that, you set it aside in that separate account, set it aside in a separate account. And then if you come

in at a $3,000 a month, then you can pull that 2200 out of that account and use it for the for the 5200. So I would try not to change your lifestyle much at all, probably for the first, I don't know, six, seven months, y'all can decide, till you get a good rhythm of knowing, okay, we can cover what we need to cover. And then hopefully, Andrew, as you start, you know, progressing, you guys will have a ton in that Peaks and Valleys fund that maybe you're like, okay, we don't need that much anymore. And we can use some of that to help replace a car, right? Or you can use that for other things if you need to. But I would have that account just to give you ease that you have enough to pay those bills. And then my next goal, so have that going, would to bump up that $1,500 to, I mean, honestly, if I were you guys,

I would probably try to shoot for like $20,000 in that for an emergency fund, because you are so heavily heavily commissioned and you have a kid and all of that so I would shoot for like a four five month or so emergency fund okay okay and um so obviously start with the emergency fund and then kind of look at investing maybe into like a Roth IRA or something like? I would look at that after you get this $20,000 or whatever you and your wife decide for an emergency fund. I would get that first. I would not be taking money out for retirement at that point. I would keep retirement on pause. Once that emergency fund is fully funded, then I would fund 15% of your income into retirement. So yes, you're exactly right.

Does your company offer a 401k? They do. It's pretty nice. They'll match up to 6%. Six. Okay, perfect. So what I would do, Andrew, after the emergency fund, again, that's your sole focus. After that, then I would go up to that 6% match. Then that means you would have 9% of your income left out of the 15%, we suggest. So go up to the 6% match, take that 9%, fund your Roth IRA. You can go up to this year, I think it's $7,000. Your wife can do a spousal Roth IRA. I would do that as well. And depending on how much you make, once you fund those, if you've already funded those all the way up to their maxes and you still have some percentage of that 15% left, go back to your 401k and put more money into that.

Does that make sense? Okay. Yeah. It does. Yeah. The formula we think about is match beats Roth beats traditional. So always go to the match first. And then once you hit the match, go to a Roth IRA. And then from there, you can go back to your 401k. Okay. Okay. One more quick question. I got some advice from someone that's in full-time commission sales. They are paying rent one to two months ahead, just in case, like if they have a really bad month, like at least like rent is paid,

or I just kind of wanted to pick your brain on that. I would keep it in a high yield savings account, dude. Yeah, you could, but I would keep that peaks and valleys fund like we were talking about. So you have, and you'll have your emergency fund and that emergency fund can be used as well for rents right if something comes up that month and you need it so i think you'll have enough cash in that peaks and valleys fund that we were talking about and this emergency

fund that you're building that if something came up and you couldn't pay rent for a month you could take two grand out of one of those okay i mean i i don't think there's yeah and there's nothing like i don't think it's gonna hurt you or break you if you want if you if that for some reason feels great just to be a month ahead on rent it gives you guys extra peace you can um because it's not that it's not like six months ahead because i would say that's way too far because you don't know what's gonna happen in six months um but yeah so if that gives you some extra peace, you can. But also there's a part of me

that just kind of likes to have the money in the bank and I get to decide that if I needed it, I can pull the trigger. But if not, I don't need to. Okay. So just obviously bare minimum, get bills paid, all that stuff, and then just dump into savings

and a high yield and emergency fund. Yep, exactly. For sure. Okay. Yep, I would do that. And then beyond that, stuff and then just dump into savings and a high yield and emergency fund yep exactly for sure okay yep i would do that and then yeah and then beyond that um yep you get to move on to investing which is awesome i mean you're 30 years old and andrew i'll say this um i'm probably my my father's daughter in this way but dave was always like if you can get a commission job get a commission job because there's so much like when you're on salary it's great because it's predictable but you just get paid what you get paid but commission you get to drive some of that like if you i the the hardest thing i had to overcome coming here was my i'm structured

similarly right you have a floor and then once you cross it then you're on your own yeah 100 and i don't know that i can ever go back because you love commission i i'm in control of my destiny and if this channel is closed and this channel is closed, cool. Then I'm going to put everything into that. Right. So, um, I love it, but it does take some planning and I, I'll, I drive the accounting guys crazy. Cause I'm always like, what's the number? Like I drive bananas. Cause I'm still insecure, but, um, I love it. I love it. I love it, man. It's great. Well, congrats, Andrew. We're excited for you guys. This is The Ramsey Show. Our scripture of the day comes from 2 Timothy 2.6. It is the hardworking farmer who ought to have the first share of the crops. Booker T. Washington said, excellence is to do a common thing in an uncommon way.

All right, let's go to Kevin in Tampa, Florida. Hey, Kevin, welcome to the show. Hey, how are you? We're doing great. How can we help? I've actually been following the show for a while. So I'm kind of a little stressed out. I'm just trying to see if maybe I can get some more guidance.

We got you, man. What's up? I'm working three jobs. I'm exhausted of a little stressed out. I'm just trying to see if maybe I can get some more guidance. Gotcha, man. What's up? I'm working three jobs. I'm exhausted. I work Monday through Sunday. And I know now's the time to do it. Not necessarily needing the fun time, but, um, I've never had savings before. I'm always living paycheck to paycheck.

And, um, for the first time I have $1,500 saved up in my savings. Yeah, dude. Good job. Hey, Kevin, how old are you? Sounds great. Whoa, whoa, whoa. Hold on, hold on. How old are you?

Yeah, I'm turning 31 Saturday. Okay, hey, I remember in the middle of my chest when I was 29 years old and my wife showed me an ATM receipt that we had $1,000 in a checking account. What you've done is a big freaking deal. I'm proud of you. I appreciate it.

Give me a good source. I appreciate that. Hey, you hear what I'm saying? The thing is, when this momentum started a few weeks ago and after I started this momentum, I started working through jobs, started to save some money and whatnot.

Between all that, I got into a car accident. Of course. Because of so much of listening to you guys and Dave Ramsey's show, I hope I made the right decision. It was either pay parts for my car. My car was still runnable. So either pay $ either pay 1800 for parts or you know get a put

a magically down payment of i guess two grand down on the car and just get whatever used car but the car that i've been driving it has a new motor has a new motor i had to replace the motor you did hey kevin you did what was right you fixed the car you're gonna limp along until you get this thing out of control so you did what's right that's fixed the car and you're going to limp along until you get this thing out of control. So you did what's right. I listened to you guys a lot. I was like, you know what? I don't want to go back. My car's paid off. I don't want to go back. Good job.

How can we help you? What question you got? I know I have $1,500 in savings but I'm still paying for stuff but I don't want to work three jobs anymore. How much debt do you got, brother? About $9,000. Okay. What is it? I'm still paying for stuff, but I don't want to work three jobs anymore. How much debt do you got, brother? About nine grand. Okay.

What is it? So one's a credit card. How much? The other one's a credit card. Give me one second. I'm sorry. I can't give you too much. We're live on air, brother.

Yes, sir. So one's a credit card, about nine grand, and the other one is care credit for my dog. I had to do two surgeries on him, and that's pretty much it. How much is that? Two bank credit cards, actually. So all that total comes up about nine grand. How much on the care credit

account i want to say about three grand okay okay and but you said the credit card was nine thousand is it more like six thousand so i combined i just in my head combining them all three and that's good oh okay okay so two credit cards the vets and then all those three come out to be 9,000. Okay. Okay, tell me your three jobs. What are you doing? What kind of jobs? So Monday through Wednesday, I work construction. Thursday and Friday, I'm a vet tech. I work at a vet hospital.

And then Friday nights, I leave the vet office to go serve on a boat. So I work Friday nights,, and Sunday as a server. Okay. Dude, that's what I'm talking about. What are you making in each one of those jobs? I'm actually a firefighter, just haven't got hired on yet. I have to study to take my national registry for EMT. Once I do that, I can get hired on the department.

When do you take that test? I haven't scheduled it because I'm nervous to take the test. I need to pass the national registry. I failed it too many times last time. I'm nervous to take the test. I need to pass the national registry. I failed it too many times last time I had to retake the course. Okay, so how much, Kevin, how much are you bringing in per month with all three of those jobs? Roughly about four grand. For each job or for all of those jobs? For all of them.

Yeah, you're working way too hard to make it four grand. Yeah, which one is the most lucrative, would you say that you're getting paid the most per hour? Um, I guess construction, 17 hour cash. Okay. Um, the serving job I can,

I can make two grand one week and I can make, um, two weeks I can make two grand and the other two weeks I can make maybe a grand. Okay. What do you want to do longterm? What's like your career goal? What would be amazing?

If Kevin was doing this at 37 years old, what would make you excited? You're a fireman, right? Yes, sir. Full time. I have a plan right now. What's your plan? What's your plan? Three to five year plan.

Take my National Registry of the NT exam. Get hired in the fire department. I actually finished the insurance course, take my life and health insurance exam so that I can use those life insurance to pay in fund for school. I want to go back to school and send it to my associates and get my bachelor's in vet med.

All right, but listen to me. You said you failed the exams a bunch of other times. That happens. It's life. Shake that off. What are you doing different right now so you don't fail these next ones um do you have a tutor nothing yet i have to i have to get a tutor okay let's let's put that at the top of your list and how much will you make for to be a fireman kevin per year um i believe starting off with about 55 okay that's great yeah so i think that's a that's a that's great. Yeah, so I think that's a very...

And once you get my paramedic, it goes up. Okay, okay. So I think that's a fantastic route because, yeah, you're working a lot to make $4,000 a month, right? So that is the next goal. And until then, I mean, I would continue to do what you're doing. Are you married? No. No, okay.

Where are you living, man? Tampa, Florida. I have a roommate okay what's your what's your living what's your living costs every month about 850 okay is that for rent yeah okay and if you were to estimate how much how much does it take you to live per month, including rent, with food, utilities, car, everything? Gas? I don't know. Maybe like... Probably $1,200 maybe? No, more than that.

$2,500 for food and everything? Yeah. Let's say $1,800 just to be super generous. Okay. Okay, so where is the other, let's pretend $2,200, where is it going out of that $4,000? Right now, we'll be going to $15,000 in my car. On a regular basis, I'm not sure.

That's the problem I'm having. Okay. Are you doing a detailed budget every month, Kevin? I downloaded the Every Dollar Budget app. Yeah. I put some stuff in there. Okay. I don't think it's 100% accurate.

I'm trying to figure out how to use it completely, so I'm messing with it. Okay. No, that's great. So I think my goal would be, let's say we could get our living. You're saying 1,200, I jumped you up to 1,800. But again, I want you to run these numbers of realistically bare bones.

And let's say you get it down to maybe 1,600 a month. I don't know. But that there's an extra $2,000 that you can find, Kevin, that is specifically allocated to pay off debt. You have 1,600 saved, incredible. And if you could do that, Kevin, I mean, gosh, in four months, you could be completely debt-free

if you throw the 600 at it. And then hopefully by that time, you've been taking your tests, firemen, all of that, you get a job, then you can build up that $1,000 to three to six months of expenses and start working your way up. But I would be really diligent. You're making four grand a month. You're saying you only need $1,200. Again, we're going to be generous and give you $1,500, $1,800 a month. But you should

have $2,000 or more, $2,200 somewhere. And I know you said you're fixing your car and all that. But I mean, I would be so diligent, Kevin, of taking that money, that extra money that you're making, and allocating it towards these debts and getting them paid off. Because again, you can get this all paid off in four to five months. That's right. So I want you to do a couple of things. One, I want you before the day is over,

I want you to have called and made your first appointment with a tutor. You got that anxiousness you feel about the test. You failed some tests, big deal. Everybody does. I want you to head directly towards that. And the way you do that is ask yourself, what am I doing differently this time than I did last time? This time, you're gonna have a tutor. This time you're gonna have some practicing practice problems. You're gonna, you're gonna do some practice exams with the guidance and you're gonna run this thing through.

And I want you to lay off the vet tech program right now. Take that weekend job and make a whole bunch of money. See if you can get another day on the lot there working for construction. And you're killing yourself for not enough money. So I'd rather see you back it off for a little bit less money right this second and use that time to study. And get yourself through these exams so you can get on to the job that you want to do, making the money that's going to get you out of all this mess. Hang on the line. We're going to hook you up with Financial Peace University and the EveryDollar

app for free. Thanks for calling, brother. Great job, Kevin. Thanks to all the guys in the booth. Thank you, John. Thank you, America. This is The Ramsey Show.