The Ramsey Show - App - Broke Is Normal—Do You Really Want to Be Like Everyone Else?

Episode Date: December 19, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Jade Walsh, our Ramsey personality, number one best-selling author, and is my co-host today. Open phones here at 888-825-5225. Merry Christmas, America. Allie is with us. Allie is in Phoenix. Hi, Allie. Welcome to the Ramsey Show. Hey, thanks so much for having me.

Sure. What's up? Yeah, so I have a question around a large lump sum of money I just inherited. Okay. So I have two older sisters, they're twins, and they are quite a bit older than me. They're technically my half sisters. And my dad came into their life when they were two. And 16 years later, I was born. So they're about 18 years older than me. And great dad, he unfortunately passed away when I was four and they were in their early 20s. And I just found out this past Thanksgiving that through his company's old life insurance, there's $100,000 in an account that I am set to inherit solely.

How old are you? When my mom, I'm 26. Okay, so this company, your dad left you as the beneficiary for a $100,000 life insurance policy. And why was it not dispersed to you then? It was in a custodial account. Well, at 21, it becomes yours. Yes. She did not want to tell me about it because she was afraid I would misuse it.

Wow. Okay. She doesn't really have that option legally, by the way. Okay. So you're now how old? I'm 26. Okay. All right. So you have a hundred thousand dollars and you're going to go pick up the check now, right? Yes. Good. However, however, um, her closing comment to me after informing me of this account was you know he was your sister's dad too even not by blood. Okay and she would be right about that. Yes my question to you is you know when he passed my sister stepped in they financially helped take care of me and my mom. They were there every second. They moved back in with us. They are my best friends, my everything. So what do you want to do? There's obviously something that you want to do. What do you want to do?

Well, my holdup is I am in the market to buy a house, and this would be awesome to to put towards the down payment but i do think they deserve something why why do they deserve something um they did not move back in and take care of you all because they thought they had money coming to them that's true they moved back in took care of you because your your family they loved you your little girl and your mom needed help and they came in and helped their mother and their little half sister they didn't do it for money you're under no obligation to repay that act with money yeah that's like saying oh i i used to change your diapers so you need to share this with me no it's your freaking job when you're the mom you change the diapers that's what you do you don't get to you don't get to play that card later as a as a way to get paid back

now if you just in your own heart you thought man i want to give i want to share this and it has nothing to do with you feeling nowated. No, this is guilt. Your mother is a travel agent for guilt trips, and she's a bit of a control freak because she illegally withheld this information from you for the last five years. I mean, she could get her butt sued if you were a jerk. I mean, what she did was straight up illegal okay not criminal but i mean she just can't you can't do that it's not it's just well i i thought that you know she

might misuse it's not her option the law says at 21 it's yours the custodial rights dissipate. They disappear at 21. So, you know, there's a lot of guilt and passive-aggressive floating around your whole family. Yeah. Yeah. So I think you know. I personally, your dad left your name on it. If he wanted their name on it, he would have put their name on it. Yeah.

If your mother could have talked him into it, he would have put their name on it. And so she's now trying to fix this the way she wants it afterwards. Sorry. I don't need to be mean about this, and I don't want you to be unkind to anybody and I appreciate that you love your half sisters and that's wonderful that you have a great relationship I'm glad you do but it should not be based on money it ought to be based on love and family and so you you you are not lesser of a person if you only follow through on your father's intent. Your father left you this money.

He did not leave it to them. So you do whatever you want to do. I don't want you to share it out of guilt. I don't either, but I will say, I mean, I will say if I was left, there's four of us, if I was left on my dad's insurance policy, $100,000, and if I just was privy to the fact that my siblings got nothing, I think that I would be inclined to divvy it up. And I'm not saying that that's right or wrong. I just can understand. I can understand it. And I agree with you that that's right or wrong. I just can understand.

I can understand it. And I agree with you, Dave. I don't think it should be done out of guilt at all. You should never do any generosity without a cheerful heart, period. But I can understand it. And I think I can understand it. I can understand it if you want to do it. Yeah. But I'm not okay with this coming from your mother who illegally kept this information from you for five years definitely well you know he loved them too you know we love puppies too so maybe we ought to give some to the humane society you know oh brother i mean yeah that's not good killing me here yeah Yeah, that's not good. Killing me here. Yeah, because then she might decide that she should have some, too.

Yeah, he loved me, too. Wow. He loved all God's little creatures. You know, geez, you're killing me. So, and I think the situation, if you go to, like, with your brothers and sisters, you're talking about that i think that's uh dependent why did your dad not leave them on the policy well because they're misbehaving sure okay then then you wouldn't you'd be violating his memory and his intent to and his blessing to do that or um he just screwed up the paperwork he wasn't watching what he was doing that's also

possible that was a mistake if that was the case then i might want to share it yeah and i think that's the thing she knows she knows what's really at play here and i think that you were i'm 100 sure she is his blood daughter the other girls aren't yeah and 100 sure he left it to his daughter yeah there's no question in my mind i'm reading. I'm reading his mind. And it's just that the wife didn't like that. Yeah, she didn't. Sorry. The way it works. 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

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that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at churchillemortgage.com. That's churchillemortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Jade Walsh, our Ramsey personality is my co-host today. Thanks for hanging out with us. John Deloney and I are doing the Money and Relationships Tour this spring. These cities are selling very, very quickly. If you'd like to come, we'd love to have you.

Putting a new twist on this. At each stop, we're going to put out a bunch of topics before the show while you're sitting in the audience getting ready, and you're going to vote on what we talk about that night. So you're going to form the content for the show that night, and we'll be in Louisville, kentucky april 21 durham april 23rd atlanta april 25 phoenix may 5 fort worth may 7 kansas city may 9 you don't want to miss this ramsey solutions.com slash tour the money and relationships tour and that's dr john

deloney and me coming to a town near you. Lexington, Kentucky is on the line. John is with us. Merry Christmas, John. Hey, guys. How are you guys doing? Better than we deserve, bro. What's up? Good.

So me and my fiancee, we're wanting to get married, but we're kind of running into a tricky situation. So basically she has a lot of health issues. She takes a lot of medications and some of those medications are just, you know, ridiculously priced. I mean, like one of them is just, it's five grand a month. What is her health problems? So she has diabetes type one, um, epilepsy, seizures, and, um, she has a bunch of other stuff, but here recently, cause we have a seven month old, um, she recently got diagnosed with postpartum depression. So she's having a pretty tough time now. Um, but basically we want to get married, but she's on Medicaid right now, which right now, which fully covers the cost of her

medication. And if we get married, they would use my income and deny her Medicaid. And then what would the prescription cost on your insurance? And that's kind of why I'm calling you guys, because I'm a little confused about this insurance. Like I have, I don't know a lot about it. I mean, I see our deductible would be eight grand, which seems like a lot. Yeah. But then you could look and see what, how your prescriptions are covered. Have you called and just asked him and said, Hey, I'm getting married. I'm moving my wife to my insurance. Here's the medications that she's on. What would it cost me?'m not i think that's your first step okay okay because i thought so the deductibles on insurance it may or may not

apply to prescription drugs we don't know in your policy okay even if it does even if it does it's an eight thousand dollar out of pocket not eight thousand dollars a month which is something you could plan for for the year what do you make uh i take home about 32 okay all right and what do you do for a living i'm an hvac i'm just starting out okay so you're you're just getting your apprenticeship behind you, and you're starting to make some tech money, which means your income is going to double in the next three years. Agreed? Correct.

Yeah. Okay. That's good. That's a good trade to be in, man. Good for you. And so, but here's the thing. One of the ways you want to look at major situations like this is, okay, I've got this barrier.

Number one, what can I do about it, which Jade gave you a great suggestion, go ahead and get more information gathered up, because you may be worrying about something or you may have made an assumption here. I mean, I have no idea. It may be that some of those particular drugs have a generic form that can be bought for $500 a month. I don't know. I mean, it wouldn't be that unusual to hear a story like that once you decide, hey, we've got to figure this out because we're getting married. Okay. back and say all right even if it's seven thousand dollars we've got we've got to figure out something else because we don't want to be on medicaid for the next 40 years and not married right so you

have to have a long-term perspective on this that says, okay, I've got to fix this because this doesn't play well long-term. This month, if it is $7,000 a month, and that's the only option, which it's probably not, but if that's the only option, this month sucks. That's right. That's right. But you cannot let that be the only thing that says, I'm going to determine this because we know we don't want to be on welfare

for the next 40 years. That's not a good life plan. So we've got to find a way to get off of welfare, which is what Medicaid is, boys and girls. And so let's get off of that and let's find a way around that. So private insurance, generics uh other solutions to the medical issues start talking to the docs and say okay medicaid's off the table so how are we gonna how are we gonna make sure she's okay that's right and even if even if you do call and

find out that the prescriptions are covered with her health conditions you're always going to want your deductible laying around because you never know what's going to pop up that's going to send somebody to the ER or they'll have to have, you know, procedure done. So that's something that you really should weigh heavily. And we say it all the time when people have three to six months of emergency funds, one of the things you weigh in is the health of you or your spouse. So something to think about. It sounds like you got a high deductible HSA probably. Yeah. And so that sets you up to have a good emergency fund. And you're probably budgeting to recoup that deductible once a year. That's right. And, you know, because you're probably going to burn through it with, you know, an ongoing struggle with epilepsy and ongoing

struggle with some of these other issues. So cool. Hey, John, that's a good question. You're a good man. I'm glad you're looking at this through the right eyes and figuring out how to solve it. Appreciate you joining us. Alex is in Denver. Alex, welcome to the Ramsey show. Merry Christmas. Hey, Merry Christmas. Thanks for taking my call. Sure. What's up? Had a question today, not about gift giving, but gift receiving. Um, so on third shirt, we've been using your guys' baby steps since about late 2022, so a little

over a year. We're just finishing step two. We're on our last $8,000. We should be done by about May of this year being all paid off. So we're excited. But the issue is, so I found out that my wife has been saving some of her discretionary income on the side.

Some of the pocket change spending money that she's had over the years. And she bought me what I would consider a pretty expensive Christmas gift. What? About $850. What? It's something that I've wanted for years. I'm a nerd. What is it?

It's the Lego Millennium Falcon, the giant one. How long did she save up her fun money to do this? Probably six or seven months. Okay. And so the thing is, I'm still in the trenches. My mind is at paying off some more debt. How come hers isn't? We're almost spring clear.

How come hers isn't? I'm sorry, what? How come hers is not in the trenches i don't know i thought it was yeah was the fun money i just have a question was the fun money that something that you guys decided was going to be on the budget and it is and you have a line item too yep okay and you've been spending yours on what you consider fun? For the most part, usually mine goes towards day trips and vacations for us. Okay, and then she's... So a little, like, you know, out in the local area,

go eat at a nice restaurant every once in a while. Okay, and then she's, instead of spending hers on what she would consider fun, whether it be for her or both of you, she's stacked it up for this gift. Yes. And what you're thinking is, don't stack it up for the gift. If you're're thinking is don't stack it up for the gift if you're going to do anything put it on the debt and well i mean yeah i mean it's a tenth of our remaining debt why wouldn't we just you know pay off that much more of it well because you guys said you had fun money no i disagree well i'm not saying that that's right but i am saying that

you guys created a budget you both shook and agree on it you spent your money on one way and now you're now that you see her she's been she's stacked up hers you're like oh wait a minute I want the truth is Dave is right you guys shouldn't have been doing fun money to begin with if you're paying off this level and we're not going out to eat we're not going on vacation we're totally intense and totally focused and I don't know how in the crud you come up with 850 bucks in a super gazelle intense budget you should have been putting you should be squeezing every dollar out and anytime you have money left at the end of the month you throw it at the debt that's right you don't stack it up in the corner this is not a squirrel fund so I mean you do whatever you want to do but that is not following the baby steps neither of you when you're in baby step two neither one of you are when you're baby step two you're throwing everything

you don't see the inside of a restaurant unless you're working there we're not going on vacation we're getting out of debt and so you guys are you've been you've been focused but you've not been intense and so you do whatever y'all want to do in your plan our plan is all this money should have been going towards the debt all of it all along you would have been done by now yeah yeah probably probably this is all ramsey personality is my co-host today student loan debt is an epidemic and defaulting on debt makes you feel even worse but our question of the day sponsor why refi refinances defaulted private student loans and they build a custom loan based on your ability to pay you'll have a payment you

can afford with a low fixed interest rate that you couldn't get anywhere else. Go to yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. All right. Today's question comes from Rick in Michigan. My wife and I have no debt, a fully funded emergency fund, a paid off house, and we have about $150,000 saved for a down payment on our next home. We follow the Ramsey plan and we are Baby Steps millionaires. Congrats. We are so close to having enough to pay for the next house and cash between savings and the proceeds from our current house. However, my wife wants to move sooner than later. She has suggested getting a mortgage again and keeping some of the down payment savings to use for monthly payments and other such ideas. I love my wife, but I know these aren't great financial decisions. I don't want to buy a house in a manner that's not financially responsible and then resent

her for pressuring me into it. Am I being a jerk here? No, I think you're being a really smart guy. And I think you're holding up your end of what you guys said the deal is because when you walk through the baby steps, you know, there's seven of them. And part of that is you kind of draw this line in the sand and you go, okay, like, we're not people that borrow money anymore. Right. And in this case, it would be really frivolous and stupid for you guys to go into debt for a mortgage when you don't need to. That's just, I mean, truly that's stupid. You don't need to do it. So I think that you're right. You have some conversations to have with your wife. Something is pulling her

in another direction. I don't know if it's comparison direction i don't know if it's comparison i don't know if it's something she saw some ladies at church doing i don't know something something is pulling her in a direction houses quit looking at houses until you have the money when you go look at a nicer house you come home and your brain you have to get house fever true true and you have to take like cold showers and stuff to get rid of it it's um it'll destroy your brain it'll rot your brain and so um that's what happens i mean so instagram or physically visiting the house or looking at the monzillo or whatever else quit doing that you know don't go test drive a car when you got the money to buy it all it does is stir stir you up and cause you act like a four-year-old that's such a good point you're right they're looking at houses too soon you need to wait till you have the money yeah yeah just save up and then when we're ready to

make the move then we'll start talking about you know looking and this is what this is the budget we have and we don't need to look at houses more expensive than the money we have. Facts. And, you know, it's a simple thing because it causes us. So, you know, no, honey, the process that got us here to millionaire at our age was to get out of debt, house and everything. I cannot go back into debt. I can't do it. And it's not an act of love towards you for me to cave and do something that's not good for our future and our family so no yeah she's i'm reading this again

she's desperate she's like oh she saw something i'm going to you she got the fever oh yeah laura's in tampa flor. Hey, Laura. Merry Christmas. Hey. Merry Christmas, Dave and Jade. I am so excited to be talking to you guys. Happy to talk to you. What's up? Well, my husband and I are Baby Stubs Millionaires, and I have you guys to thank for that. So I really appreciate everything you're doing.

Cool. My question is, given my disability, I'm wondering if you think I can successfully start and run a franchise as long as I start debt-free. And if not, is there anything else that I can do to earn six figures ever again? What is your disability? I acquired a brain injury about six years ago, and I haven't worked since. I was a marketing director, and I coached independent contractors, top producing independent contractors in real estate. And I've got these great skill sets that are just kind of sitting here with me and it's driving me crazy. Well, what are the limitations

that you face because of the brain injury? Sure. So I can work about two hours a day, about four to five days a month. I have really bad days where I can't get out of bed. And then I have some mild cognitive impairments. I make more mistakes than I used to before. Yeah, I mean, there's a lot of chronic conditions, but that's what really applies to the work situation. And what type of franchise are you trying to open up? Well, we have a cleaner at our house and she's fantastic.

I was thinking, I know that she's interested in talking with me, but if I could bring her on as a GM in residential cleaning services and her portfolio comes with us, that maybe that's an option. Okay. And so you're saying I can have her hire a bunch of cleaners and I'll just run the thing and she's my partner. That's where my mind is right now. Interesting.

I'm not going to lie. I'm hung up on the two hours a day, four to five days a month. Now I'm not saying that your, your screen says, is it possible to make six figures again? I think so. Okay. But this is definitely a limitation. Dave, what do you think? You can work two hours a day. Correct. My brain starts to, cognitively, I start to decline after

about two hours of problem solving. And that's when I make more mistakes, and things get a lot harder for me. Okay. So whatever it is you're going to run, obviously we have to be able to do it with that number of hours. Yeah, yeah. And then everything else has to be delegated to the rest of the team, and can you make six figures? Absolutely you can make six figures? Absolutely, you can make six figures.

But I don't know if it's in house cleaning or not. I don't know about that. But I think you've figured out what we've got to work with here now. And so what we have to do is we have to have something that makes – that we can leverage those two hours into to lead others to run things on the other six hours a day out of eight that the place is running and I'm not running it. What made you choose house cleaning? Is that something you're passionate about and know about or is it just because you have someone who is a possible partner? Exactly. It's, I know that daily operations is where I need someone to take over so that I can do more of the high level stuff of scaling a business. So she's the only person I

have in mind as a potential GM and that's her expertise. But that's not my passion at all. Yeah. I would not build something that you didn't have passion about because it's going to be too hard. Whether you're facing brain injury or just doing a small business is hard. Number one. Number two, I would not build something that is dependent upon a single individual. I want a concept that works and then I'll look for the individual to plug into it. And if that individual doesn't work, I'll plug a different individual into it. But we don't do org charts in our organization charts in Ramsey

based on the person that's here. We do the organization chart based on the proper way to run the business, and then the people that are here populate that chart. So every time i've built something uh for built a job for someone that's that's really messed me up because then that person leaves and you're screwed right i think i think i'm in a place of just pulling straws because yeah i just want something i appreciate the, and you do have capacity to do something. But there's no rush.

You're millionaires. You're okay. It's not like you need the money to pay the bills. You just need something to do because you're a doer. And so that's a good thing. But let's take the steps and say, all right, what am I passionate about? What can I plug into? How can I build this out in such a way that we're backfilling for these deficits,

but we're utilizing the gift that I do have, which is very powerful two hours a day? Yeah. And some people don't work but two hours a day anyway. They just sit around the rest of the time. Do you think franchise is still then a path? I don't think franchise answers your question. What answers your question is building a system of some kind. It could be a franchise.

But what you're looking for is you just need a duplicatable system of some kind that you can delegate out and run. And hang on, I'm going to send you the assessment for Ken Coleman's Finding the Work You're Wired to Do and send you the book as well. I think you'll enjoy that and it may spur some ideas. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours

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So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Jade Walshall, Ramsey Personality is my co-host. Open phones at 888-825-5225. Brian is in Atlanta. Hey, Brian, how are you? I'm all right. Thanks for having me.

Sure. What's up? I recently found some of your videos scrolling Facebook and started listening to some of your stuff. I haven't done any of the things that you talk about, but I'm trying to get started. I recently bought a truck. It was a horrible decision that I didn't know better at the time. And I'm a prime example of just because you make more money

doesn't mean you fix the problem if you don't know how to spend it. Because I doubled my income three years ago. And celebrated it with a truck payment. I did. And I've just steadily gone downhill. And I've been trying to sell it, but I owe a little bit more than it's worth because I took the hit of depreciation on a brand-new truck.

Man. How much did you pay for that truck? Over $60,000 in finance. No money down. Man, oh, man. I was raised that credit was everything, and I've worked my butt off to have really good credit, and it's done nothing but hurt me.

Well, I have an opportunity because the truck's a lemon, and Toyota Corporation is going to have to buy it back. However, the state I'm in has a 20 cents per mile deduction for depreciation. And that's going to mean I have to pay a little bit over $8,000 just for them to buy out my loan. I don't have $8,000 sitting in the bank. That would be a loan that I'd have to get just to get out of this law. But you would be trading an $8,000 loan for a $60,000 loan? Yeah, I got like $46,000 left on it, yes. Okay.

But I have the credit. I can go to the bank and sign the payment and get a signature loan for $8,000. It's just, is it the right move? And then they pay off the loan or they take the truck they pay off the loan and take the truck so then you did you sell your truck for 46 000 then could i know i've had it for sale for 46 000 for a while oh okay all right so it's not what's it worth uh it's uh last time i looked it it's about 40. Trading in, I think, mid-30s.

The value plummeted on these things because of all the recalls. Got it. Mm-hmm. And it just killed the value of these trucks. So you're getting a better deal selling it back to them? I think so. Yeah. It's just, you know, I'm trying to...

Yes, I would rather be $8,000 in debt than $46,000 in debt. I mean, it's similar to what we would tell anybody if they were upside down in a car. We tell them to go to the bank, get a loan, clear the difference, and get something in cash. And this is very similar to that. The only difference is your buyer happens to be Toyota. But, yeah. Mm-hmm. Yeah.

Yeah. Yeah. Okay. And how quick is all this coming through? I have a bunch of documents I have to get together and send to them to get an offer to find out what they're actually willing to pay for the truck. But it'll probably be the first week or so of January. Oh, so they'll cut you a check pretty quick then? Yeah, they're going to cut it to the bank.

That's what I mean. I've got to pay the difference. That's what I mean. Yes, I would do that deal. Yeah, and you might have something, I don't know, just talking to you, you might have something laying around that you could sell to get the money to clear the difference without taking out a loan. Just a thought.

And you're going to have to get a little truck of some kind, a little $5,000 or something to get around in. I don't know. That guy sounds like he's got a lot of little things with engines laying around that he could sell. Just kind of got that feeling now. Adams in Spokane. Hey, Adam, welcome to the Ramsey Show. Thank you very much.

How can I help? So I have a question about interest-bearing loans. My understanding is that interest-bearing loans between brothers is prohibited. If I put my money in a savings account and I'm getting 4% interest back, am I just removing that responsibility from my loan because now the bank is then charging another believer interest using my money? You're not in charge of the bank and the bank is not a brother well what if the bank is being run by believers it's not a bank is an institution it's not the employees if an individual we can have a discussion about an individual loaning an individual money

but institutions don't have souls and i promise you banks don't have souls and i promise you banks don't have souls but then on the back end of that if somebody goes to a bank like if i were to go to a bank and borrow money for a mortgage i'm using the money of other believers am i maybe am i enabling them to how do you know? They didn't loan you the money, though. Right. The bank pooled a whole bunch of people's money, and so I don't know who the money belongs to. Exactly. So you can't make that judgment. Again, you can't make that judgment. Right. It just seems like that's a way to sort of obfuscate what's happening so that

removes responsibility from anybody no that's not the intent the intent is uh uh that's not the intent of the scripture to start with but uh and banks didn't all get together and go you know there is this line in Deuteronomy, and to get around that, we're going to create this whole system. No, they didn't do that, I promise. They didn't think a thing about Deuteronomy, not once. And so, no, that's not, you're not doing anything wrong. It's like saying, if I do business, if I buy a pizza at Pizza Hut,

but they take credit cards for other people to buy a pizza and put them in debt am I supporting Visa putting people in debt through Pizza Hut no you're not you're just buying a pizza yeah yeah you know you're really working you're really working hard here to be guilty of something that's a good way to put it it's something that i don't really hear anybody talk about so i'm i'll help you i'll tell you why okay because the scripture that you're referring to does not say interest in the hebrew it only says it in the new king or in the king james the rabbis in judaism do not teach what you're talking about. Thus, Jewish people have been in the banking business from day one, okay, from the time there's been Jewish people. So that most

scholars, even evangelical scholars, will tell you that the actual Hebrew word there is better translated usury than it is interest. And so it's not really a situation of Christians can't charge interest at all. Usury is the overcharge of interest. Christians should not overcharge interest, and so there were states decades ago that had usury laws that prevented interest rates from being above a certain level because of that, and it came from that scripture, but the word usury there is a, when you do the word studies on it and you get down into scholarship on it, is more akin to overcharging of interest than it is the charging of interest.

So you could make the case that credit cards are usurious because they're 18% to 28%. That's a usurious, an overcharging of interest rates probably can't make that case with a mortgage rate and i can make the case that you shouldn't be borrowing money at all because there's not a single positive reference in the bible to debt but i can't tell you that borrowing money is a sin. As a matter of fact, I'm positive that the Bible never once refers to debt as a sin. It refers to it as lacking in sense. You're a slave. You know, it's a curse upon you if you go into debt. All these negative connotations,

but never once is it a sin issue, and never once is it mentioned as a salvation issue. It's not. It's just instructional from Scripture to avoid debt. It's instructional in Scripture to have a budget. It's instructional from Scripture to live on less than you make, to not cosign. There are instructions all through Scripture regarding money. This is one of them to not overcharge particularly your brother a usurious amount of interest but um dude when you fall down the the pharisee rabbit hole where you're trying to unpack every uh uncross every t and every jot and tittle you you really can't pull the thread long enough to make to keep the sweater enough to keep the sweater intact. I know, that's right.

It doesn't work. And so walk in grace, brother. Walk in grace and be good and be kind, be compassionate, be wise, and don't try to figure out how the banking system is somehow built on dodging one Bible scripture that doesn't even mean that in the Hebrew. This is The Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

I'm Dave Ramsey, your host, Jade Warshaw. Number one best-selling author Ramsey personality is my co-host today. Open phones at 888-825-5225. Zachary's in Houston. Hey, Zachary, how are you? Hello, I'm doing all right. How are you, Dave? Better than I deserve.

Merry Christmas. How can we help? So I'm in a bit of a situation that I'm looking for some guidance on. My wife and I just started your program about six months ago. We're $43,000 worth of consumer debt down so far. Good. And I just lost my job a few days ago. Oh, no.

Right before Christmas. That sucks yeah yeah yeah that was pretty exciting to get a layoff right before christmas what do you what do you do what kind of work were you doing uh construction superintendent so i was making about 160 000 a year uh i've got a job lined up to start again in January. That's good. For $170,000. Oh. Well, this worked out. I'm going to kind of manipulate your system a little bit for my own peace of mind.

And my wife and I are debating. I want to stop baby step two right now because we have two vehicles in our house. That's all that's left. And I want to do a six-month emergency fund and then go back to attacking everything. That's just because you're feeling some type of way because you lost your job? Correct. Okay, but did you get severance? No.

Okay, so how many checks are you going to miss? Theoretically, just two. Okay. So where's the panic? It definitely has you nervous. Yeah, it makes you nervous, but there's no reason to panic. Well, for a long time before I took this job, I tried to out-earn my stupidity and that didn't work. So I took the job

and like I said, we got pretty serious about it six months ago. I don't know. It's just... What does your wife make? Nothing. We're a single family. Okay. No, I would not reorganize

the baby steps because you got scared once. No, I would not reorganize the baby steps because you got scared once. So you just keep going back to the cars and then move on to it? I mean, if you push pause on everything for a couple weeks while you get your paycheck started again, that's fine.

But are we going to, because of the layoff are we gonna in january not pay down on the cars and instead build up an emergency fund uh because we got laid off back in december no uh-uh no that's just being that's that's fear-based yeah it is um it's also not wise and well that's that's the reason for the calls. Yeah. How much do you owe on the cars? We owe $13,000 on my truck and $24,000 on her car.

Okay. All right. So we're not bad. Sometimes when I flip this around a little bit, it wakes my spirit up, and I shock myself a little bit, so I'm going to do that to you, okay? Instead of building your emergency fund because you're scared, sell both cars because you're scared. That's good.

You ain't that scared. Well, it got silent. All of a sudden. Here's the kicker. Here's the kicker that we've been waiting for that hasn't happened yet. I own a little bit over a million dollars worth of real estate that's been on the market between eight different houses. And when interest rates spiked, sales stopped. So we've kind of been waiting for one of those to sell to just go ahead and pay everything off and be done.

See, all of a sudden you start thinking different when i sold your cars that's what i did that's why i do that kind of stuff to myself because what that does is it says okay you're not really that scared you're just trying to intellectually manipulate a system that's not really broken so work the system dude um in fairness i do have photos out to a dealership to buy my truck because i have a ton of equity in that that's good hey didn't you say i really wasn't suggesting you sell them i'm just saying if you're that scared that's the move you would make yeah but you're not that scared is what that points out so that because then all of a sudden i found out we got

a million dollars where the real estate floating around in this conversation that didn't come up when we first got laid off a few minutes ago so you know no you're gonna leapfrog through all these baby steps when that other stuff sells so fast anyway no you don't need to sell your truck and no you don't need to stop if you want to take a heartbeat take one month off of don't pay down on debt pile up cash for one month out of your budget whatever you can live on living on nothing and then reapply that cash to the debt at the when you get comfortable again the other side of that and start push a pause button on the baby steps then push play again later on that's fine but no we're not going to do them out of order because you got laid off yeah and you really have to think through this because the the point of part of the point of the order of

these steps is you want to actually finish paying off the debt if you were to do these out of order number one it'd take you forever to save up the three to six months because you're still paying payments every month so it would elongate that part of the process and then people would be like oh i got three to six months i can just let that debt simmer the car doesn't really kind of count yeah it's not real down and then before you know it you haven't done anything and so do it the right way it works for a reason and you know you're not the exception of what i would do is i would take this layoff and the fear that goes with that is my motivator to kick this thing into gear and get it finished. Boom. That's what we do.

I'm going to use that as my push button. Jaden's with us, and I'll bring Jaden up in a minute here. So here's another thing. You guys listening out there, if you've listened to the show for a long time, you've heard this happen before. And, Jade, you alluded to it a minute ago um the bible says out of the abundance of the heart the mouth speaks so what's going on inside of you comes out of your mouth before you realize it in other words and so it often happens on the show

when you and i or any of the other personalities ask someone, okay, how much debt have you got? And they give us like their credit card debt and something else. I'm like, and how much do you owe on your car? And they, oh, yeah. Yeah. Because they didn't have that in the debt column in their head. Yeah, that's right. And so out of that, what that tells us is in their heart, that's not debt.

That's right. Because it's so freaking normalized that you uh you've normalized the backache to where you've always had a backache and you go oh yeah i forgot about that ache doc says what hurts oh nothing what about your back oh yeah yeah because i've gotten used to that backache you know and it doesn't no longer feel that way and so um and they do that student loans, too. That's right. They put it in a different column in their brain, store it back in the corner.

And how much debt you got and how much on the student loans? Oh, yeah. Oh, yeah. Oh, yeah. And so don't recategorize this stuff because society has because society is stupid. Normal is broke in America. Looking good. Driving good.

A student loan that's been around so long you think it's a pet. And you recategorize these things in your brain. Don't do that. Don't do that. Put it all right where it needs to be. In the crosshairs and pull the trigger. Knock it out. Knock it out, baby. baby this is the ramsey

show you Hey, you guys, I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. thousand dollars it's easy to join and fairwinds partners with more than 5 000 credit union

locations around the country so you can bank in person wherever you live but if you prefer the online experience you can log on to fairwinds and do anything you could do at a physical location so go to fairwinds.org slash Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's fairwinds, F-A-I-R-W-I-N-D-S.org slash Ramsey. Jade Walsh Hall, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Jaden is in Casper, Wyoming.

Hi, Jaden. Welcome to the Ramsey Show. Thank you for taking my call, fellas. Sure. Merry Christmas. What's up? My wife's been pestering me for quite some time now to take her on a vacation. I'm not sure right now is the time to do it. We're both pretty young. I'm 25. She's 21.

We got a little one on the way here before too long, and we're getting ready to purchase a property we intend to build on. Okay. Do you guys have debt? No debt, no debt. We've been very fortunate in that way. Community college educated. Okay. What's your household income? I bring about $50,000 home after taxes, and she brings about $20,000. And that's part of the issue is that next year her income will be going away. She's a preschool teacher now, but with the little one, she's going to stay home. Do you have an emergency fund saved? We do. The thing that concerns me is that after the down payment on the property, that's what we'll be left with is with our emergency fund. So to take that vacation, we'd be left with is with our emergency fund so to take

that vacation we'd be kind of having to dig into that a little bit well a vacation's not an emergency so i would not dig into the emergency fund to take an emergency to take a vacation ever um what does she want to spend she wants to go somewhere warm, you know, Wyoming. This time of year, you want to kind of leave it a little bit. About 2,000. 2,000? Okay. So have you run out the numbers on what? Here's the thing.

I'm not saying no, and I'm not saying when, but you can decide when. You can look at this and go, okay, my wife wants to take a vacation. We've never taken a vacation. We're debt-free. We have an emergency fund. We're also trying to move in this house. What can that look like, and when is the time to take it? Because if you just tell her no, and you kind of just swat it away like a gnat, she's going to get irritated. Well, no, that's not your position

anyway. It's your position for two. She's not a child, okay. The two of you ought to sit down as two adults and go, okay. Yeah. Vacation is a good thing. Uh, emergency funds, a good thing. Having a baby is a good thing. Buying this piece of ground is a good thing. None of these are bad things. Now, where do they fit in our lives with our goals as grownups?

You know, you can't just be a kid on the cereal aisle throwing a fit. You have to be like an adult, both of you. And so I don't want you being her daddy and have to talk her off the ledge. I want her to grow up and look at it and say, as a grown woman who's has a child, what is responsible for me? Yeah, I want to take a vacation. I'd love to take a vacation. I'd love to take a vacation. But as a grown woman looking at this, I can't afford to do it right this second because I'm not going to be working next year after the baby comes. Or as a grown woman looking at this, I've got a child on the way.

I really want to do this. You know, we do have $86,000 in the emergency fund. We probably can go ahead and take a vacation because you've overfunded the emergency fund, Bubba. I don't know what's in this emergency fund. I mean, she needs to participate in this decision as a grown-up, not as someone who has a parent that they're married to. That's right. And if she's laid out how you guys can do this then and it's wise and it's wise then you've also got to be open you gotta be a grown-up though it can't be

i want it i deserve it you know i don't bull crap that's what 14 year olds do that's not what grown women do grown men do no um so no you you have to be emotionally mature and say what is good for our family and if in the midst of that we can do this reasonably and we don't leave our family vulnerable with no emergency fund because we went on vacation that would be stupid yeah that's not um or leave our family vulnerable since you're going to be quitting work and staying home with the child and you can't make your bills because you went on vacation last winter because it's cold in Wyoming which is not a shock to anyone in Wyoming for sure and so you know that kind of so I mean what I want to do is just pull her into the conversation as a grown woman not as someone who's I have I can't get my husband to let me do

stupid stuff I mean this is just that's ridiculous that's not a conversation you want to have in a marriage it needs to be the two of you are we have this child we have this future what makes sense and yes vacations are part of the equation I got no issue with that at all but but where they fit is your point Jade absolutely you know where and when. Yeah. They don't strike me as people who are not smart with their money. They paid off their debt. They've got an emergency fund. It looks like they're trying to do this house the right way.

I have a feeling that he's laser focused and sometimes has to remember, like, hey, we can do some things sometimes. That's just my spidey sense. Could be. Could be. Yeah. Could be loosening the nerd up loosening up the nerd yeah but she needs to do that with reason that's right not with emotion that's right yeah and that that's a fair that's a fair request for a grown-up steven is in little rock arkansas hi steven welcome to the ramsey show merry christmas merry christmas how are y'all?

Better than we deserve, sir. How can we help? Okay, so here's my situation. I'm 20 years old. I'm engaged and I'm planning on getting married in June. And that being said, we're looking to get an apartment together in June because that's what you do. You move in together once you get married. I'm completely debt-free. She has a little bit of student loan debt, but that's kind of beside the point. The question for me is my grandma opened up a credit card for me to use strictly as a gas card, and that's my only credit card, and she always pays it on time.

But that being said, I have credit. She pays it. Oh, you're 20 years old. Why does your grandmother pay your card? That was her way of saying that she wants to support me through college. That was her gift to me. Okay. And so I can totally afford my own gas, but that's just the gift she wanted to give to me.

But I know that I want to get this apartment, and I really like the sound of what y'all talk about, of letting your credit score roll over to nothing. But I'm afraid that if I say, hey, Grandma, thank you, but let's close this card. I appreciate the gesture. I can pay for this, that my credit score will plummet, but it won't flip and disappear before that time in june when i'm trying to get an apartment honey you don't have to have a credit score to get an apartment okay that's that's that's mythology we've done this about six times in ramsey in the

last six or eight years one of the personalities will jump on the phone and call 15 apartment complexes and say hey i'm moving to nashville um do you guys i don't have a credit score because i'm just out of school and uh i got zero credit score uh do you guys uh you guys rent to people without a credit score nine out of ten say they do some of them a couple of them want an extra deposit but most of them are just no it's no big deal come on over that's just complete mythology that people have spread out there among your age group it's just not true exactly nine out of ten are not don't care if you have a credit score

awesome i did not know that i was under the impression that my credit score would plummet and that might jeopardize whether or not we'd be able to move that. Your credits, when you stop borrowing money, your credit score will go away. It's not going to plummet. It's just going to disappear. But to Dave's point, he's right. There are plenty of places that you don't need a credit score to go. And so you'll just do your due diligence and find one. Yeah. I just can't rent from those guys because they require one. I can rent from these people over here, though. And by the way, that's a great litmus test because when you move into an apartment, you want to have a super or whoever's in charge that uses their brain because things are going

to happen. You're going to need to talk to them about things and you want something fixed, right? You want somebody who uses their brain. So that's a great way to start. Yeah. And if the only way they approve you is by a number, that's not using your brain by definition. No. Yeah. Very good. Good stuff. Yeah. You can look those calls up. We've had different personalities do this over the years and they're on the YouTube channel and you can see them making phone calls to the apartments and it's recorded and you can hear the conversation yeah george did

one on on the fine print remember yeah that's the one i remember and he he did he went out and he was able to call him and there were plenty that did you just have to call around a little bit it's not going to be the first it may not be the first door step that you go to that's all yeah and yes you need to it'll be good for your marriage to get off the grandmother dole. I know, that's right. Wow, good for you. Good for you, Stephen. Well done, sir.

This is The Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host today. Thanks for being with us. Christmas is here can you believe it wow hey last minute shoppers out there it's game time don't miss a last chance to grab a life-changing book or set of tools this christmas to help people really i mean you can even give them a great book that changes their life or an ugly tie. You get a choice, you know. Total money makeover is 30% off. Building a non-anxious life is 30% off. Breaking free from broke is on sale.

Georgia's first number one. Questions for human decks are just $12. All kinds of goodies. And in most places, we can still get it to you, but you need to go there today. RamseySolutions.com slash store. Chris is in Seattle. Hi, Chris. Welcome to the Ramsey Show.

Thank you much. Sure. What's up? I'm calling in to understand kind of what my focus should be. I've got a three-year-old kid at home. I've got a wife who's been battling cancer for the last 10 years roughly but it's taken a tough right hand turn in the last few months and gotten different prognoses ranging from you know a couple years to maybe five at most um so trying to figure out what should my focus financially be on whether

making the here and now as enjoyable as we can versus trying to make sure we're still saving for the future of my son and I well I'm sorry it's tough how old are you guys uh 38 37 I got a three-year-old son at home we've been together for almost 20 years now yeah okay um Wow. Okay. Well, the turn of events, the prognosis change, would change my strategy, I think. Mm-hmm. Okay. You're saying they've put her on a clock and it's a shorter one. Yeah. Yeah, we had some new re-diagnosis is kind of progression of disease.

Okay. All right. Well, what we teach folks to do is you're not working the baby steps. You're fighting cancer. So what I would do if I were in your shoes what do you make together we're just over 250 so i'm making about 130 or so myself i would just pile cash as high as i can pilot okay and do nothing else i mean I would do that with the same intensity that I would have getting out of debt or something

if you were in a more normal situation. And when we're piling the cash as high as we can pile it, I've got three things I want to accomplish with that pile of cash. One is obviously any kind of care or um uh trials or anything that you need to write checks for you write them right and so we'll take care of her in other words that's that's the first goal of the pile of cash the second goal would be to do um some uh, to make memories. Um, and, and, you know, the, the trip you want to do, or the, uh, thing you need to purchase to make things more comfortable around there right now. Um, the thing you've got to be careful with on that one is that you don't go out of control with

that because in the name of that, do some really stupid things you know like i don't want i don't want to hear later that you spent two hundred thousand dollars on some trip that's not what i'm talking about okay but i am talking about okay there's some things that that if we were just if everybody was healthy and we were leaning in getting out of debt we wouldn't be doing this thing but we're going to do it in this case instead whatever this thing is but reasonable dollar amounts and not getting sucked into um in the name of we have a short clock we're going to do we can get away with anything because you can't because you got to live with it later right yeah so anyway do some things like that that are good and strategic wise things do anything for her to take care of her fight cancer do some things for the family and then the third thing is you're piling up cash for

uh someday what day i don't know um that this is behind you you just take that money and push play on the baby steps and you throw it at the debt. And you go after the debt then, and you go work your baby steps when you're the other side of this. She's healed, and she's here, or she's healed, and she's in heaven. I don't know which one it is. But either way, it's one of those two, and this is in your rearview mirror, so to speak. And then you start executing a good financial plan at that point. But right now, we're just going to stack cash to fight cancer, have a good life,

and any cash that's left over in that stack is not wasted because we'll be able to use it to start the new version of our journey later. Does that all sound fair? That does, yeah. I mean, up to this point, we've made a pretty good progress I'd say financially with everything and have been living fairly frugally. It's just a matter of... I don't care if you save 200 grand is what I'm saying. Just pile it up.

There's no downside to that. And then if you need to, if you want fly to paris and do a clinical of some kind fine book a first class ticket let's go do a clinical trial in paris i don't care i'm making that up i have no idea but i mean you know but the um i've certainly got friends that have fought cancer situations and um i found it very handy to have a pile of cash while they were doing it that's what i'm saying that's right so um and i'm so sorry chris that for you guys so sorry uh how old is your is your baby three years old okay wow so he it's hard for him to grasp other than just mommy's sick yeah yeah. Wow. So she's down right now then? Well, we just started new treatment on last Saturday,

so it's in its kind of wait and see how things react, but she's going to be stepping away from work after the new year and kind of play it by ear from there. Yeah. And the new treatment just a beefed up chemo or what? It's kind of the next new thing on the line. It's kind of attack things from a different angle and see if we can halt progress again and hold it as long as we can. There's new side effects that are unknown how she'll react at this point.

Tough stuff. The cure is brutal sometimes. Yeah. Chris, I'm sorry. But, yeah, I really wouldn't focus on any financial goals other than just being wise with the cash flow so that we're able to stack cash to those three goals I talked about, okay? Okay.

Just give yourself a lot of grace, a lot of room, and live this out and lean into it, fight cancer with everything, every fiber of your being. And that includes the fibers of the dollar bills coming out of your wallet. Same thing. Wow. That's tough stuff. There are times though. I mean, it's good to reiterate. There are things that pop up in life that, uh, supersede what you're trying to do financially. Yeah. You know, you need to, you're in the middle of a storm, you push pause. That's right. You don't work the baby steps in a storm.

Whatever the storm is. I mean, you lose your job. That's right. And, well, you can't, you don't have the income to fight it.

You know, you don't, you, somebody's ill like this, you don't have, you know, you've got to stop and focus on that. There's a tragedy of some kind or another.

You have to stop for a minute. You do. And get your, get your do and get your get your bearings get your feet back on the ground and uh then decide from there what the next steps are and where you go that's not a um that's not a baby step it's a just push pause and walk away yeah and you know use the resources that you have coming in your income income, to navigate the storm, to be ready and to push your way all the way through it. So, yeah, that's a big deal.

Chris, I'm so sorry. That's tough, very tough. We'll be praying for you, brother, and for her, obviously. Very, very cool. Open phones here at 888-825-5225. I co-signed with a girlfriend of six years on a car. Uh-oh. Uh-oh.

Now we've been broken up for two years. Uh-oh. Uh-oh. And she's been late on multiple payments. Uh-oh. She is not eligible for refinancing because of her credit. Uh-oh. Hoo-wee.

We're going to coffee. Baby doll, you're selling your car you don't i'm gonna sue you because you're destroying my credit basically yeah see you made a mistake you signed with your ex-boyfriend on your car and now you can't pay the car so now you're selling it people do not buy crap with people you are not married to. Hello. I know that's right. Wow. This is the Ramsey Show. If you want to hear the next segment of the Ramsey Show after this one's over, you'll do that on the Ramsey Network app. That's the only place you can hear it except for a few talk radio We'll be right back. Don't necessarily make the air. So you get a, you know, kind of a behind the scenes look.

You can search the show for certain topics and find callers calling in about certain topics. That's pretty cool. And you can also send us an email. Ah, question. All right. Today's Ramsey Network app question is from Davey. He says, I'm wondering why baby step one isn't start your first budget and giving every dollar a name. Then baby step two would be save your thousand dollar emergency fund and so on.

Since you always emphasize budgeting first, why isn't that number one? I don't know why this is making me laugh. I mean, yeah, budgeting is a budget. You're right. Budgeting is the foundation of everything we teach. Matter of fact, some folks in here that I work with work with we call like baby step zero or just kind of like there is that thought to it it is the foundation but i mean listen the reason it's not like that is because it's not like that no it's you know the reason it's not like that is

it's not a financial milestone it's a tool and a practice that hits a financial milestone. All the baby steps are financial milestones. So it's not a financial measure. It's the same reason insurance, you know, buy health insurance is not a baby step. It's not a financial milestone. It's something you need to do. Buy life insurance is not a baby step.

It's something you need to do. You do it the minute you find out about it. Doing a will is not a baby step. It's something you need to do. You do it the minute you find out about it. Doing a will is not a baby step. It's a tool. It's an item. It's a practice. It's a habit. It's a thing you need to do that causes you to hit the financial milestones. That's good. That's why it's not a baby step. And so all of those other things fall in the same category as the budget does. There are things you need to be doing. Living on less than you make is something you need to do, but it's not a baby step because it's not a financial milestone. $1,000 is a financial milestone.

Getting all your debts paid off except your home, baby step two is paying them off smallest to largest in that order, using the debt snowball, is a financial milestone. Finishing your emergency funds, a financial milestone. 15% of your household income, measurable amount of money going into retirement is a financial milestone. Addressing kids' college needs in baby step five is a financial milestone. Six, paying off your house is a financial milestone.

All of these are money things that we're measuring as we make progress on money. They're not the thing, get a job, take extra jobs, are not a financial milestone, but they're things you need to do to create an income would be necessary. That's right. In order to do these things. So increase your income. These are all tactical things you do to hit the milestones.

That's why it's not and um it's i i think the question was was semi-serious so you're not going to rewrite the baby steps you're not going to re-release them not today on davey's plan not not not we're going to stay with dave not davey there you go that's what we're going to do all right emmanuel is with us in dallas texas you go. That's what we're going to do. Emmanuel is with us in Dallas, Texas. Hi, Emmanuel. What's up? Merry Christmas. Merry Christmas. Merry Christmas.

The numbers, just to get through quickly or efficiently, the numbers are $94,000 in debt, $56,000 from a car. The car max value would be $40,000 and i'm paying uh 1200 per month for that oh why yeah so yeah right exactly exactly so uh my story is kind of like a five-year

timeline uh straight out of college um i moved to californ I can, you know, continue my college relationship after working at home. The job I had was like miserable. Um, and there just wasn't any growth in it. So I decided to just take the jump. I followed love and, um, things, things were working out. I ended up becoming a mortgage loan officer. And so I made great money, uh, at a young age, um, making like over 10K a month. But, you know, that didn't last for a long time. The industry died because the rates crashed. After that, I got into recruiting.

Same thing. I made amazing money. I was making $50 an hour, and I was sugar daddy. Everything was fine. But then the economy, you know, it crashed. The math layoffs again. And so now, you know, now I'm pretty much just, I've been doing everything. It's not a work ethic problem.

It's things just haven't really been swinging my way, but I've still been working and it's just kind of like a paycheck to paycheck situation. And yet you still, you bought a $56,000 car? What's your question? Uh, that, so, so that, that, no, no, no no no that that is a result of like me having to deal with like family dynamics and family issues um so through all of through all of that wait a minute i'm sorry there are no family dynamics that require a fifty six thousand dollar car that's absolute bullcrap uh okay okay so you you couldn't you had to impress somebody in the family i mean what kind of ridiculous family dynamic causes you to buy a 60 000 car you can't afford

right exactly so if i could explain um i'm dealing with like a super difficult mother-in-law are you married uh are you married no i'm uh we're engaged okay god and she told you to buy the 56 000 car no no that was as a result of that was just like i so i keep having to put my foot down with the mother-in-law because things just it's kind of the situation like she does like things that are just not acceptable. I'm so sorry. What the crap does this have to do with you owning a car? What's the car?

I'm calling for clarity. I know. But why does a mother-in-law have to do with you buying a car? I don't understand. It was crazy. All of this is happening while i while i while we are two under two i have a daughter that's two years old and my son is two months okay so so i got laid off you got laid off you got two two young kids now and it wasn't your wife that wanted you to get

the car and you felt pressure from married or your fiance i. Or your fiance. No, I got the car because I told her I don't ever want to have to rely on my mother-in-law because I've been living with them because my family lives in Maryland. But not relying on your mother-in-law does not require a $56,000 car, honey. Yeah, we got to reframe it. We got to reframe what's in your mind

because I think in your mind, you thought somehow that was going to give you some sort of freedom i don't know how but maybe you were borrowing her vehicle i don't know but you could get a 5600 car yes you got to sell that car immediately freedom don't sell it to carmax because they're not going to give you the best value you need to do a private sale so look it up my guess is that you'll get pretty close to the 56 that you owe on it you have to get out of this immediately. And it sounds like there's not the right boundaries between your fiance's mother and you. And so you and your fiance are going to

have to deal with that. You've got two under two. So I heard you say that I think you were laid off or between jobs. So you've got to get a job very quickly. So your homework list is, I sell the car private sale. I get a job. I draw boundaries with the people who are not my parents. And even boundaries with this, she's not even your in-law yet because you're not married.

So you need to get married. So that's on your list. Number three, no, number four is get married this weekend. Yeah. You got a bunch of this crap out of order. So, and then you can just look at mother-in-law and go i you don't have a vote on my car you don't get a vote for my car immediately

yes yeah yeah and no one has a vote on your car your wife and and she's not even your wife yet so let's make it make her your wife and then the two of you decide on cars but a 5600 car will allow you to not borrow other people's car and you need to and this is for anybody listening who feels discombobulated like my guy who was just on the phone you got to sit down and have a moment with yourself maybe you have a journal maybe you just you got you if you don't sit and say what was my part in all of this you won't change if you're saying well it happened because we got two under two and it happened because I got laid off and it happened because grandma and it happened because my mother-in-law you're never then you're never at fault and that means you never have to change and that's not how life

works you're gonna have to sit down and go okay what did I do I'm the one that said yeah I'll sign my name right here that's the truth you're the one who signed for the car so you're responsible for it I felt pressured and I made a stupid decision boom there we go easy done it easy does it done that I've done that myself we've all done that that also helps you to not react to pressure ever again that's right you won't do it again if you take responsibility for it. My tolerance for people telling me what to do with my money is pretty low. Like zero now. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Jade Walsh, our Ramsey personality, number one best-selling author, is my co-host today. Merry Christmas to you, America. Open phones at 888-825-5225. Jessica is with us in Baltimore. Hi, Jessica. Welcome to the Ramsey Show. Hi, how are you? Better than I deserve. Hi, how are you? Better than I deserve. What's up? I'm good. My husband and I have quite a bit of student loan debt that we have been trying to pay off for the last several years. And we have been proposed with the option of moving about an hour south from where we are to live with my mom. And she wouldn't be charged this rent or anything, maybe just a little bit of utilities to move in with her.

And using our equity in our townhome that we sell to move in there to pay down our student loans. How much student loan debt do you have? About $105,000. What's your incomes? So we both make about $64,000 each. Okay, and are your jobs remote? So I work hybridly. I kind of drive all over the state of Maryland three days, three out of the five days a week. My husband is a worship pastor at our church. And so he would have to drive the hour north through Baltimore to get to work every day. So that is the biggest downside to it. It actually puts me How much equity in your town home? About 80. Okay so when it still wouldn't clear the debt.

How long have you all been married? Three almost five years. Okay and and what was the debt what did you pay off before this is I'm guessing this is the last thing on the list so we do have a car loan um we got a car we have a one and a half year old daughter and we have baby number two due in july okay um so which always requires a car payment not okay so um how much is your car debt it's about twelve thousand dollars we're paying about or paying over the minimum every month we're paying 300 on a 230 payment i'll be honest with you i don't like this plan um i i wanted to get a little bit more backstory because you you opened up with saying we've been at this for a while and i just wanted to gain yeah i wanted to gauge what that intensity was not at all i don't i'm going gauge what that intensity was. Not at all.

I'm going to be honest. I would not do this if I were you. You're about to have two kids. You're going to be living with your mom, and your husband's going to be driving an hour through a major city every single day. I think that you're about to add even more stress to your life if you do this. Okay, you make $128,000 a year. All right? And you guys have not learned to live substantially below that yet. And you need to do that now. You need to cut everything out of your life.

Quit borrowing money for anything. Get your stupid credit cards out and cut them up. Get off of Amazon Prime. Stay out of restaurants. And know you're not going on vacation you're broke people and get yourself on beans and rice rice and beans both of you pick up extra side jobs let's get your income up another 15 or 20 000 and let's start knocking off 50 000 a year in debt four thousand dollars a. That's what you need to do. And I wouldn't sell my townhouse.

I would sell it only if after working on this for three years, you could not get out of debt. But I think you could be debt free in three years. But you're going to have to live on scorched earth to do that. The problem is, if you sell this townhouse and fast walk this, you're going to not be in the real estate market anymore. You're going to have a miserable lifestyle with the situation you're moving into. And with your husband now creating a commute to be a worship pastor, all these things are not going to be working in your favor. And you still haven't learned to live on less than $128,000 a year. And so you've still treated the

symptom rather than the problem. Yeah. I would not do it. I would not do this at all. Nope. I'm with Dave 100%. And sidebar. I would sacrifice a lot of other ways rather than that way. Yeah. And sidebar, most of the worship pastors I know have another job, a second job as well, or something that is a side hustle that brings in a lot of money. So you may want to consider that as well. Side hustles. Side hustles are kind of part and partial of baby step two. Yeah.

I mean, musicians can do a wonderful thing called piano lessons. There's so much you can do. And you can make serious money teaching other people music and that kind of thing as your side gig. That's what I did. And you can kind of set your hours. I can imagine you did. You've got that talent without a doubt. So what can you make giving lessons, do you think?

A dollar a minute, easy. Start with a dollar a minute and chart 60 is the lowest. And then for kids especially but if you if you've got some things on your resume then do a hundred dollars an hour that's where you'd start so what what did you teach voice or instruments i did voice um i only did voice my husband did piano and yeah i charged a hundred dollars for an hour and that's the minimum you can't do less than an hour and so yep that's how it works there we go so i mean yeah that sounds like a lot of money it is a lot of money and a lot of work and you get out of debt you paid off 465 000 by the way yeah that's doing what we're talking about doing so

we're not suggesting here jessica to do something that we haven't done or seen people do hundreds and hundreds of times. You're trying to find a hack for this, and there's not a hack. You get a machete and hack your way out of the jungle. Dave, that is so true. That is so true. You do. And I want to validate that because sometimes your debt feels overwhelming and you do want to look for, is sometimes your debt feels overwhelming and you do want to look for is there an easy button is there something i can sell like that's human nature to want to try to find the easy way out but when there's not one then you have to buckle down there's no getting around it there there there's no substitute for getting your hands dirty there's

no substitute for getting worn out for feeling frustrated and just fighting through it that is so I had to go when when I was beginning this process after going broke Sharon and I I had to get to such detail down in the weeds get my fingers in every little thing and change all of it because I was so far off track with the way I was coming out. I was constantly looking for a shortcut. And so, and I had to go down to know I'm going to do this tiny little thing and this tiny little thing and this tiny little thing.

And then the scripture started coming alive where Jesus said, when you're faithful in the little things, I will give you then more to manage and so the what ends up happening in this process of these people going through these ridiculous sacrificial times in their lives is not only do they have the arithmetic move where they get out of debt but it changes who you are show you're right yes reforms your character that's right and you can't and if someone just came in and wrote you a check and paid off everything you would have missed that character transformation that's right count it pure joy yeah when you encounter tests and trials of all kinds no discipline seems pleasant at the

time but it yields a harvest of righteousness and And so it just, and I don't want to sign people up for pain. That's not what my goal is. I want it to be as fast or as easy as it can be. But, but most of the time, your shortcuts and money are a bad idea. I agree. Most of them are a bad idea. This is The Ramsey Show. Jade Warshaw, Ramsey Personality is my co-host today. The best way to make the most of your money is by creating and sticking to a monthly plan, a budget. Every dollar, the world's best budgeting app makes it simple to plan your spending, track your expenses, be in agreement with your spouse, stick to a plan that causes you to win and become a Baby Steps millionaire.

We're going to show you how to do it. Download every dollar for free in the App Store or go to Google Play or click the link in the description if you're on YouTube or a podcast. Kara is in Pittsburgh. Merry Christmas, Kara. Merry Christmas. Thank you for having me on your show. Sure. What's up? Okay. I have a question because my boyfriend and I have a little bit of confusion. So we're purchasing Financial Peace University this evening and we want to sit down, we want to do the budget, but we're not married yet.

So we don't necessarily combine our debts. Correct. And so our question is, how do we actually budget doing that? Like I personally have almost 194,000 in debt. 50,000 of that is student loan. 144 is my mortgage. I don't have a car payment, credit cards, or anything like that. And he has about maybe 20,000 from just a personal loan that he had to take out at a point in time in his life

when he didn't really feel like he had much of an option. So when we sit down and we're creating our plan together, I mean, we are planning on moving forward with marriage. We have that talk quite a bit. Do you live together? We know, we do live together, yes. And so we're trying to build our life, but then my moral compass is like, you know, like I own my own home and you know in the future maybe five ten years from now we probably sell this home or rent it out and buy a home together I think I think what's clouding you I think what's clouding you I think what's making it confusing is you are living in the same space but you're still very separate because you're not married and so the short answer is no you're not going to combine your money you'll still very separate because you're not married. And so the short answer is no, you're not going to combine your money.

You'll do a separate budget with your money and you'll have a money goal and he'll have the same thing over on his side. And if you really think about it, if you guys were dating and he had an apartment and you lived in your house, this wouldn't even be a question to you, right? Yeah, it's like we're merging more and more and more together as we move forward. So it's like...

It's very, very dangerous to combine finances with someone that you're not married to. Do not do that. Okay. What's keeping you from getting married? What has you at the place that you would live with this person but you wouldn't marry them? Oh, we would absolutely get married. It's a financial issue. So what happened was... marry him oh we would absolutely get married it's a financial issue so what happened was it doesn't cost anything to get married well it does cost a little bit i

ended up getting really really ill um so once i moved in here i ended up getting very very sick and to the point where i'm self-employed so so I actually lost half of my income. I'm just now on the path of it. And how does that prevent you from getting married? So you're saying he moved in to help you with the money? No, no. He had moved in. We had plans, and then all of his money went towards actually supporting our household because I ended up getting so sick.

So we didn't have— I'm still confused how it's a financial issue that's keeping you from getting married. Because he has a dream, he has a vision for how he wants his wedding to be, and he wants to make sure that we have the resources. Let's clarify. Let's clarify. Let's clarify. Because the legal document of getting married is going to cost you nothing.

You go to the courthouse, you're legally married. A party is something different. And don't get me wrong. I'm all about wedding parties. I love it. It's great. A vision of a house you live in, it should occur with your wife. I didn't hear what you said.

I'm sorry. I said a vision of a house you live in should occur with your wife. I'm calling BS on his little vision. Okay. I'm serious. I'm serious. Okay. So anyway, the answer to your question is no, you do not combine finances with your roommate.

You only combine finances with your husband. And if you're waiting. If I woke up in your shoes, I'd be husband and wife by the end of the weekend. Yeah. If you're waiting so that you can afford a wedding party, I wouldn't wait. I would get married, get the document. You don't even have to tell anybody. Nobody brought up a party.

He just brought up a vision of a house he wanted. And that's why he can't get married. So, no, that's not, it's not a financial issue. See, you're saying things out loud that don't even make sense. That's what we're calling you on loud that don't even make sense that's what we're calling you on it honey because we love you all right so anyway the answer to your question you walked into a fan you just thought you thought you're asking a simple question you get chatted i apologize but the um but we love you and we want to help guide you through this

because we've seen this happen so many times and it ends poorly. So please do not pay debts. Please do not combine budgets with people you're not married to. Please do not purchase things with people you're not married to. You will get in trouble. Okay. I've got an email laying here that I answered in an earlier hour. I co-signed with a girlfriend of six years on a car. Now we've been broken up for two years and she's been laid on multiple payments. This is the crap you get when you shack up with people and act like you're married when you're not. You get yourself into a mess when you combine everything.

So do not combine it. Run two separate tracks as if you were in a different apartment, or he was like Jade suggested earlier. Run two separate every-dollar accounts. Watch it together. Now I would recommend as pre-marriage counseling that the two of you sit and show the other one your budget. That's very good.

And walk through every detail of your finances and your struggles. And he does that with his and his struggles. So you know what you're getting into when you do finally get married. Yeah, that's right and yeah yeah i i don't want to say that i'm pulling back my advice but i'm just thinking they're not even engaged they're just like they're not even engaged yet i'm just wondering about their situation i i kind of poor lady she just wanted to know I know I feel like what I'm saying is I feel like we rush them to get married and they're not even engaged so the the biggest point is don't combine

your money yeah just don't just don't don't do it don't open phones at 888-825-5225 thank you for joining us America we're glad you're here. Nicole is in Chicago. Hi, Nicole. Welcome to the Ramsey show. Hi, thank you so much for having me. Sure. Merry Christmas. How can we help? Yeah. Happy holidays to you as well. Um, so I had one question originally, and then I had a second one, if that's okay. Um, I'll start with the first one. So I have, I'm on baby step one. I have a thousand dollars saved and I'm trying to move on. Thank you. I'm trying to move on to baby step two, but I'm having some difficulty because I'm nervous

that I won't, I don't know. I guess I'm nervous that I won't have enough in my budget or like something happens or you didn't have a thousand dollars before. Why weren't you nervous then? That's because I had credit cards honestly so you cut the credit cards up i cut the credit cards i'm no longer putting anything on them i like it thank you yeah you're right it is you're right you do feel that feeling of oh my gosh i'm exposed. I'm out here. But I found that that is extremely motivating. And when you sit down and do your

budget, you're going to realize, OK, I have a plan. Having a plan is going to make you feel more secure. And the truth of the matter is a thousand dollars. It's not a ton, but it's more than you've ever had cash. And when an emergency pops up, what I found is it causes you to think way more critically and way more creatively about what's going on. Is it really an emergency? Is there another way I can handle this? What are my real options? But when you have credit cards, it completely steals that pathway of thinking and you just slide it on the plastic, right? So this is good.

How much debt you got? That is such a good point. So total about $90,000, $95,000 with student loans and everything. What do you make? Credit card. Currently, I have like a solid job that makes me $29,000 a year. I work 30 hours, so not quite full time. And then to supplement that income, I have two part-time jobs.

Good for you. Okay. So we're going to work on getting the income up and the outgo down and walk through this $99,000 as fast as we possibly can. And, yeah, and Jade's exactly right. During that time, you're going to face different things. They're going to stretch your creative bones in how we're going to do this, how we're going to do it a different way than we've ever done it before

because you can't keep doing the same thing you've always done and expect a different result. That's the definition of insanity. This is The Ramsey Show. Jade Walsh, our Ramsey personality, is my co-host today marcia is in san antonio hey marcia merry christmas how can we help merry christmas to you uh we we followed your university course and we paid off our house we paid off our car and i went to get a silly charge card on TV, a shopping card, and we found that our credit score was really, really low.

And we contacted our bank and they said, because we don't have any revolving credit, so it didn't work paying off the house. Now what do we do? We want to purchase a second-hand car. I'm sorry. It did work. You paid off your house.

The goal was to get out of debt, not get into debt. Correct. So your bank's trying to get you back in debt. Why would you go back in debt, honey? Well, we don't want to put all cash on a car right now. Why would you go back in debt you work so hard to get out that's silly pay cash for your car take it out of our retirement yeah or don't buy the car okay stop borrowing money yeah we have no credit cards we have no good no card no no payment if you but if you paid some if you paid everything off and you're truly not borrowing any money

your your score will roll to zero if it doesn't something's open somewhere and so if but it did work it worked because you're because you got out of debt, and you're staying out of debt until you talk to your idiot banker who tried to talk you into going back into debt. He self-credited credit cards. We have to put the money in and back it up, and he wants us to start using that. Yeah, of course he wants to start using

a credit card he's a freaking banker yeah stay away from those people honey get out of debt stay out of debt don't go over there with the snake handlers and expect to get anything but bit by a snake no stop that don't listen that banker he's not credible he's idiot. He's a banker for God's sake. Yeah. His job is to get you into debt. He's aghast that you broke free from him. No, pay cash for whatever you're doing, honey. No, don't go open up another credit card to build your credit.

You don't need credit if you're not going to borrow money. And you're not going to borrow money, Marcia. Stop it. Pay cash for the car or don't buy the car. One of the two. Period. That simple. That's the rule. That's what you learned in Financial Peace University. So it worked. It did work. It worked perfectly. It worked as designed. You got to exactly where you were trying to get to. Only then somebody that sells debt for a living didn't like it. Oh, shock. You want to know what happened, you know, on the same line, you have to be careful too, because once Sam and I paid off all of our debt, I'm sitting there waiting for my credit

score to roll to zero, right? Because that's exciting. If you don't have everything closed. It won't. Well, I kept looking at my credit score, but I was going to one of those, you know, free credit score, you know, credit going to one of those you know free credit score you know credit karma one of those things to check it and i'm like man it's been six months why isn't my score gone to zero they hadn't updated they'd know and they kept offering me you want to get your score up get this card you want to get and so i found out that those sites they're trying to market to you and so when i went to the official site it had rolled to zero that's what i meant and so i hadn't updated it to the official site, it had rolled to zero. That's what I meant.

They hadn't updated it to the karma. Yeah. And they don't want to update it because they want me to think that I have to, you know. That you need their service. Word to the wise. One thing we do need to clarify, though, for those of you out there, just the technicality here. 100% of the things showing up on your credit bureau report have to be closed and a zero balance. Otherwise, you're just going to lower your credit score.

You're not going to roll it to a zero. And so if you have an old outstanding collections on there that has not been solved or paid or something else from 25 years ago i don't care if it's on there you still have an open item you might drop down into the 500s and not go to zero because you're still you got one thing on there and it's bad you know so you not only have to pay off everything, you have to close everything. And you may even have to go to the credit bureau reporting agency and report to them that all of these things are closed. And then you will see that action. And then you should freeze it at that point because that's just a safety measure on your part.

Mine has been frozen since they offered that service. That's right the day it had the day they offered it we froze everything as a matter of fact we froze all of our children were minors and we froze all theirs and they've never been yeah now they're in their 30s yeah and the reason for that is fraud and if you are operating in this life where you don't have debt you're not monitoring that you're not checking that and so it's good to freeze it just to make sure nobody's fraudulently fraudulently opening anything in your name. It'll keep a lot, not all types, but it'll keep a lot of types of fraud off.

If they happen to check. That's right. They'll find it frozen. They won't issue the card to an identity thief. That's what you're looking for there. Alice is in Austin, Texas. Hi, Alice. Welcome to the Ramsey Show.

Hi, thank you Welcome to the Ramsey Show. Hi. Thank you. What's up? So me and my husband, we are selling our business. After taxes, we're getting $400,000. Wow. We are selling our house. We are restarting in a new state to be closer to family.

Wow. We have a $60,000 for two cars in debt, so we'll be paying that off, obviously. So we'll be left with around $340,000. We're starting a new business in this state. Are you getting any money from the sale of the house? We will. We will. It won't be as much. It'll around 50 000 okay so you're still going to end up with around 300 around 400 000 in your hand and what state or what state are you moving

to um so we will be moving to utah okay and then your question is what um well so we'll be starting over so we'll be setting some aside our bills will be rather low because we'll be just finding the cheapest rental we can find um until this business is going what would you do with the money where should we we we have a savings about like fifteen thousand dollars right now um so we haven't had this much money what are you to do with it, the money? That's what we want to. Well, we will be investing $50,000 into our new business that we will be starting. And then obviously paying off our car loans with the other portion.

So what would you do with the money? Should we be putting it in a money marketing account until we just want to get this new business going so we know what our new income will be? Yes, I would just put it in a high-yield savings account, get your income going, and then start talking about buying a house. But I'd be really careful and put really clear boundaries around this money because you're starting a business, and it could be easy to look at that chunk and think, oh, here's this. Here's this money here. You know what I'm saying? So I'd be really, really clear about what that $50,000 is used for and that's the limit, that sort of thing.

What kind of business are you opening? It will be an electrical company. Okay. So your husband's an electrician? So he's a general contractor. His brother's an electrician? So he's a general contractor. His brother is an electrician, and so they'll be doing solar panel repairs through the solar panel companies. So they'll be contracted out by those companies.

Okay. And what price range homes are in the area that you're moving to? The lowest is around like $350,000. And I would say the median is $500,000, $650,000. Okay. That's unusually high. The median in the U.S. is $416,000. It's a really small town with just not a lot of... Small towns generally aren't more expensive.

They're generally less expensive. Yeah. I just think it's just what's on the market currently. I think it's just what you've looked at so far. Okay. All right. Yeah. Park the money in a high-yield savings account. Don't touch it. I would prefer you buy a house for cash with it.

That's my preference. after you get settled in and you have time to look around a little bit more and find more realistic pricing than you've gotten so far because um unless you're in a ski resort or something utah should not be 50 percent higher than the u.S. average housing median. That's a good point. Yeah. So that just doesn't make sense to me because it's not true. That's why it doesn't make sense. This is The Ramsey Show. Our scripture of the day, Proverbs 12, 11. Those who work their land will have abundant food, but those who chase fantasies have no sense. Whoa.

Yeah. Bill Bradley said, ambition is the path to success. Persistence is the vehicle you arrive in. Those are both very good. Jake is in Philadelphia. Hi, Jake. Merry Christmas to you. Merry Christmas to you, Dave. how's it going over there better than we deserve brother how can we help

okay so i am a first-time home buyer and uh obviously there's a lot of anxiety going into the situation and i just wanted to hear your thoughts on, um, make sure I'm not signing up for something I can't afford. Okay. Uh, have you already signed up for it? Um, not 100% yet. What's that mean? Have you signed a contract to buy a house or not? Um, no, um, we still have the option to back out so you made an offer yes we made an offer but we still have the option back out okay what was the offer for um what's the cost 115,000 okay and what what did you say you were going to put down did you have a down payment? I was going to put down $130,000. Cool. And when you did the math on that and you saw, when you use the mortgage calculator, you did the math and you saw what

your monthly payment was going to be. Do you know what percentage of your income that was? Well, see, I am a, so I do insurance claims for a living, so my income greatly fluctuates during like storm seasons. So what do you make in a year? This year I made $170,000, but from the past six months I am projected to make over like about $240,000. Okay, but what do you make in a typical year, your normal income for a year? I know it's very volatile, but, I mean, you've been doing this a while. What do you think you'll make in 2025? Probably closer to $230,000.

Okay, all right. And that's not including my spouse's income. And what does your spouse make? Probably closer to $230,000. Okay. All right. And that's not including my spouse's income. And what does your spouse make? She makes about $65,000, but she's finishing up school, so once she graduates, she'll make $90,000. Okay. All right.

All right. So you've got a $300,000 income. It's $25,000 a month. Your take-home pay on average is going to be around $20,000, and your house payment on this calculator is what? Let me see. It's about $3,300, including property taxes and homeowners insurance. You can afford that. Yeah, you're fine.

So what we're getting at is we don't want the payment to be any more than 25% of your take home and that's everything. That's with HOAs, that's with taxes and insurance and I'm hoping that you're doing this

on a 15-year fixed rate conventional mortgage. But even if you're not, if you bump that, if you did, you bump it up to like $4,000. And $4,000 is 25% of $16,000. And it looks like your take-home pay is probably $18,000 to $20,000, something like that.

It should be your average take-home pay. Now, you've got this volatility that you have to deal with, but I think you're just fine with what you've outlined here. Yeah, good. And a 15-year fixed rate where the payment is no more than a fourth of your take-home pay, and you have no debt, and you have your emergency fund in place in addition to your down payment. That is our guidelines to buying a house. When you do that, folks, the home will be a blessing. It won't be a curse.

But you got to count the cost before you make the offer. Luckily, this worked out for you. But remember, do the math on the front end, not after you've gotten yourself into it. Paul is in New York City. Hi, Paul. Merry Christmas to you. Hi. Good afternoon.

Afternoon. How can we help? So I'm in a bit of a rut, and I'm trying to figure my way out. Last year I lost my job that was paying around $200,000. I had no debt at the time besides my home loan and my construction loan on my house, and unfortunately I lost that employment and just regained employment recently and was living off credit cards and withdrawing from my 401k, which, as you can imagine, was quite a mess. So I'm trying to figure out how to get out of this hole that I'm in, and I feel like I... Well, did you find a new job?

Yeah, I did. So you have a new job making what? Well, with the overtime and everything, it looks at $175,000, and then there's a 15% bonus on that. So I'm looking at just over $200,000 maybe. Okay, good. Around the same. Okay, good.

So tell us. How much debt did you run up? A lot. So I have about seven cards. I have a $22,000 balance, $8,500 balance, $9,300 balance, $7,300 balance. On my other side, my wife, she's got about $50,000 in credit card debt. We have four kids. So $50,000 total in credit cards? What about the 401k loan? It's closer to 80 total with credit cards.

And the home loan is just under $69,000. Okay. So the total amount is... No, no, no. Your 401k, did you cash it out? No, I was making withdrawals, and I was putting aside the money to pay the taxes on it. So you did cash some of it out, and so what's your tax liability on what you cashed out?

I'm looking at $15,000 total. And you have that money set aside? IRS and do add another $3,600 to the state. Yeah, you have that money set aside? IRS and do I have another $3,600 to the state? Yeah. Do you have that money set aside? I did. What does did mean? Where did it go?

Got spent. Okay. All right. So that's a debt. You got this tax debt now, too. $3,600 to the state and how much IRS? $12,000. Okay. Almost $13,000. Okay. now to 3600 to the state and how much IRS 12 almost 13 okay so I'm gonna I'm gonna hold Dave by like a grand like my my my income is not I'm still withdrawing out of my 401k but I'm I'm setting aside the taxes No, you shouldn't be in the hole.

You're making $200,000. What's your home payment? Tell us about the house. The house is $3,600, just under $3,700. Yeah, you're not in the hole. You're not in the hole. You guys just hadn't quit spending. You all spend like you're in Congress, man.

I think you're not on a budget. I think that you're feeling a lot of anxiety because everything's up in the air. You have no idea where your money's going, so we'll make sure we get you set up with an every dollar budget. Yeah. That's the first place to start.

You've got to get very detailed and precise with every dollar, and that includes your wife. And the four kids are going to learn a new word. No. That's your new word for the week no and uh no we're broke people dad lost his job we were stupid and we went deeply in debt and these broke people called your parents have to get out of debt now so the answer is no we have to clean this up and we're

going to give a very detailed plan and take every single dollar of your income and start working these debts off smallest to largest after you clear the IRS. That's right. IRS is first. Clear the IRS and then list all these other debts. Cut the stupid credit cards up tonight. Your wife's and yours, all of them. Yeah. And you know what? You got to stop that. Yeah. Every dollar you need, every dollar you got to stop that yeah every dollar you need every dollar you need the total money makeover because you need to understand why we're telling you what we're telling you and you need to understand the seven baby steps to walk through because that's that's what's going to get you out of this there's seven steps it's going to start with you putting

aside a thousand dollars you do this debt snowball and on and on and on because you need to not only have a plan but you need to understand how and why to change your behavior. So this never happens again. Yeah, that's the blow. That's the play. So, um, but you're, the whole thing is very chaotic and out of control. And you've got to flip the switch on that to the other side and say, now we are deathly in control.

And you'll be surprised how fast your clean this mess up once you do that. And, but the chaos is taking all of your energy. It's burning all your calories. So, hey, man, you can do this. Hold on. We'll get you signed up for every dollar and send you a copy of the book, Total Money Makeover, and you call us if you've got more questions. You can do this.

But you're going to have to tell everybody in the family we're lining up. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.