The Ramsey Show - App - Building Wealth Is About More Than Just Math

Episode Date: November 25, 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, is my co-host today. Open phones at 888-825-5225. Marta is with us to start this hour. Marta's in Portland, Oregon. Hi Marta, how are you? Hi Dave, I'm doing okay. Thanks for taking my call. Sure, what's up? So I am 57 years old. I've been married for 33 years and I've never managed our joint financials. But I find myself that that was a big mistake on my part and I need help with trying to figure out how to sort out my finances. I have a house that's in my name and my husband has gambling problems that I just discovered and it's been snowballing since I started discovering the problems. I signed a HELOC not knowing what I actually was signing.

So I owe $90,000 of that and haven't done taxes for four years. So I know that at least I owe $10,000 out of to the IRS on top of everything else I probably owe because he was taking money of my retirement without my knowledge. And so that's going to come down the pike for me and I'm just overwhelmed about how to get things. How did you find out? I found out a letter because you know he handled the mail he handled everything. I opened a letter from Fidelity and found out that he had borrowed money from there and I confronted them about it. That was last year and he said he was paying and he did pay it and I told him not to take any more money. But he continued to do that. Not only that, but he had taken money prior years and he never

told me that. He's got 10 counts because he also stole money from a non-profit that he was the treasurer are you still together unfortunately yes because people say i'm too nice um well it's getting a divorce is going to be very expensive and so i'm trying to get my finances in order he's just delusional he's sorry you're just you're just. So you're just biding your time? Is that what that amounts to? You're trying to get your finances together so that you can get out of this marriage? Or are you guys going to counseling

to see if you can solve it? Oh, no. We did counseling. He was not there. I mean, I've been begging him to do things, and he's not. Okay, so let me make sure I understand where you are then, hon.

I'm sorry. What a heartbreak. Yeah, you don't know what's going on, and that's terrifying. And you've got a 33-year marriage that's ending, and that's terrifying. Am I understanding you correctly to say you are saying you're going to end this? I am, yes. I'm done with it. He's not.

He thinks he still lives in the house. Well, it's not up to him. In Oregon, you can file for divorce. You're allowed to do that. Right, yeah. I just can't. Do you work outside the home? Oh, yeah.

I'm a nurse. So where does the money go that you make? Well, it was going to a joint account. I finally... Okay, so you changed it. It's going into your name now. Yes. Good.

How much is in that account? Right now, there's about $11,000. Okay. When you hang up the phone, I want you to call a divorce attorney and schedule an appointment for tomorrow. Mm-hmm. Please. You keep thinking you're going to wake up

and this is all a bad dream, and I'm your old ugly brother that's telling you it's not. It's your reality, and it's unbelievably reality and it's unbelievably sad it's unbelievably scary but it's going to get worse every moment that you don't deal with this you do not have to do anything except pay a retainer get a lawyer and file for divorce right now okay i did see one and um at the time i didn't even have the money for the retainer now you do yeah okay is that the one you're going to use i don't know yet i i only saw one and he he's telling me he's been a fight it and he wants i don't care what he thinks he no longer has a vote.

He gave that up when he stole money from a nonprofit, when he stole money from his wife, when he had her sign documents that she didn't know what she was signing. This is a full-raging, lunatic addict who has no boundaries, and he's going to burn the house down around you if you stand there and watch it and ignore the smoke. Please, darling, for your sake, while there's still something left, get an attorney and get him around the throat and shut down all of the financials.

Shut down everything. So he has no concept of anything. Move it all out from under his care until his attorney and the court makes you put it back. It's time for you to get very aggressive to try to salvage what you can for the next chapter of your life on. Marta, who knows about this? Are you going through this alone or do you have some folks around you? Oh, no. I mean, I have friends. I'm going to counseling. My kids know. going through this alone or do you have some folks around you oh no i mean every i i have

friends i'm going to counseling okay my kids know but i mean he took what sixty thousand dollars from my son who um who's married has two babies saying he was going to pay it back he had a a business that went bankrupt and i'm just kind of yeah you gotta separate yourself this has been done a long time and you've ignored it thinking it was going to get better hon because you're a sweet person but listen you're killing yourself here okay please please deal with this okay now this is your big brother that loves you talking, okay? Do it now. Okay. Quit screwing around with this.

If he suddenly gets healed, gets lightning bolt struck from heaven, and changes, we can always come back and talk about that later. But right now, everything you have told me in the last few minutes screams emergency. Yeah, well, he thinks he's doing better better but honey i don't care what he thinks he lost his vote and there's no proof of that every time you tell me something about him it's where he stole something or took something that's your entire description of your husband he's a raging, gambling addict. And there's no fix for that.

We work with addicts all the time. The only fix for that is to break the cycle. And this guy is not interested in breaking the cycle. Addicts can get better. But 100% of addicts are master manipulators, and they are master liars. He'll make you think this is your fault oh yeah he does make me think that that's part of that's part of the addiction okay and there's only one thing you can do with this and that's get distance financial distance physical distance housing distance call that attorney back or call an attorney today and please darling take action on this it's not

going to get better this guy's an abuser wow i'm so sorry what a heartbreaking thing to deal with yeah fastest growing addiction in north america today online porn second fastest growing addiction gambling we're seeing in our financial counseling offices those two things destroying more families than anything else. Thank you to the internet. This is the Ramsey Show. 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 nonprofit 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

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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 dot org slash Ramsey. Black Friday week is in full swing at Ramsey Solutions. We've got life-changing gifts for the people you love all on sale. Our best-selling books like The Total Money Makeover, Baby Steps, Millionaires, Own Your Past, Change Your Future are all only $12 each. And of course, The Total Money Makeover is more than a book.

All these books are. They're a life-changing gift. We hear it all the time. Millions of people have changed their lives because of a Dr. John Deloney book or a total money makeover book or a Jade Walsh book like Money's Not a Math Problem. You know, Jade and her husband paid off over $460,000 in debt. A lot of it had to do with shifting their mindset about money. Money's not a math problem is what that's about. It's one of our quick reads. Rachel's wallets, John's questions for human cards.

Man, it's all there. Check it all out. Black Friday deals abound at RamseySolutions.com. Slash store. If you're listening on YouTube or the podcast, you can click the link in the description and go straight there. Paula's in Canada. Hi, Paula.

Welcome to the Ramsey Show. Thank you very much. Sure. What's up? I have a question about adult children and financially helping them out, what my obligation is, because I hear lots of people trying to help out with weddings and education and that sort of thing. I'm at a point in my life now where financially I can do it. But am I obliged to do it when they've shown that they aren't financially responsible themselves?

No. And how do I make it fair when there's five of them? What is it? Who would oblige? You mean morally or spiritually obliged or culturally obliged i mean who obliges you well you know when when they're at a point where they're having babies and getting married you spend all i know what you're talking about i'm asking you said am i forced obliged is a sweet. Am I required is what you're saying.

Am I required? Who requires it? I guess I feel that they require it when it comes to fairness. Well, that would be called entitlement. That would not be called, yeah. Matter of fact, Paula, I have a new requirement. You need to send me some money. Here's my address.

Who gives a crap what someone else requires, right? Who is it that wants it and what do they want? Well, I don't know if they want it as far as trying to treat them fairly. You know, when there's five of them and one sees that I've spent money on one or the other, trying to help them out or spending money on weddings or having babies. And then the other ones think, well, why isn't she giving me money or why isn't she buying me gifts? You know, and I'm at a point in my life where I can do it, but I also want to be able to travel and enjoy my retirement and that kind of thing. And I don't know how to make it fair between the

five of them. So I do think that that's an interesting question I've got two kids and it would be strange of me if both were good kids if I paid for one wedding but didn't pay for the other there I could see why they would say well what's the difference you've got five kids that's a lot more is there something going on that's making you say for child number one I'll do this but for child number two I won't and here's why is it a is it a behavior thing is it a yeah I think so because my one of my children just had a baby and another one is is in is having a baby again soon and I've spent all sorts of money on one for a wedding but not the other um and why and we're saying why not the other right and one of my children is financially being irresponsible and I do want to help them why not the other? Right, and one of my children is financially being irresponsible,

and I do want to help them, but in the other sense, can I help them with stipulations? Like, I don't want to give you cash because you're going to waste it. Okay, back to Jade's question, because I'm not sure I heard the answer. If you paid for one wedding, but you didn't pay for the other, why? You decided that. Why did you, was the one that you didn't pay for the other. Why? You decided that. Why did, was the one that you didn't pay for being irresponsible

and so you didn't want to fund it? What was the reason for the differences? I think it was more of some of them have had the big splashy weddings and then others of them haven't chosen to have the big splashy weddings. So do I... So they wanted the money instead yes exactly okay

all right and you just you felt like paying for the wedding was okay but you didn't want to necessarily be uh to fund everybody the same amount or how do you make it equal you know if if i'm spending five thousand dollars on one wedding yeah well if it's your money i think you get to set the premise if you say okay for each of you this is the budget and that's what it is and you make it fair i mean they my point is they don't get to decide what you give you get to decide it okay yeah but if you've already gone down the road yeah i'm kind of stretched between two different things in this and i don't know exactly where to land i mean we told our kids growing up uh there is no fair fairs where the tilt of world is in the cotton candy is we're not socialists

we're capitalists there's not fair okay so that's how it works things don't work out that's just the way it is and i don't get to decide all of the, what life treats you fair or doesn't treat you fair, but fair is a joke. Fair is only by communist college professors. There's no fair. Okay. Welcome to the real world.

Now that's what we talk. That's on one sense. I don't have to do it equal because our family's not socialist on the other sense. I don't want to scar one of them and make them think there is a unless i'm refusing to fund their misbehavior i mean if one of them has a splashy wedding and one of them doesn't and the one that doesn't is doing heroin i don't want to give them this i don't need to give them the same amount of money well that's not fair i don't care that's not i'm

not going to fund misbehavior but on the other hand if there's no differences in their behaviors it feels a little weird that they're not getting the same amount of money so no you're not obligated but i'm just thinking through with you the the emotional and the relational parts of the discussion you are not obliged period it's your money you get to decide i don't get to money. You get to decide. I don't get to tell you what to do with it. They don't get to tell you what to do with it. You can just look at someone and say no, and no is a complete sentence. But from a relational standpoint, if there's not a reason for differentiating, that would give me as a dad concern. I can see how that would cause you a problem. If there's a reason, like a misbehavior for differentiating, I can lean into that real easily.

And I do think it's fair to say, let's say you have $10,000 to put towards a wedding. I think it's fair to say, I have $10,000 for your wedding. But if one of them says, I don't want the wedding, I just want the $ the ten thousand dollars i think it's fair to say no the ten thousand dollars is for the wedding right i mean well in this case especially since you're saying some of them are misbehaving with money you giving them ten thousand dollars is them saying well i'm going to do whatever i want with this money and if to your point if they're doing misbehavior things then that's not the gift you wanted it to be no it magnifies their stupidity when you give them money. So it does for all of us.

Anybody that gets money, it magnifies who you are, good and bad. And so when you put some zeros on the end of that, you're doing that. So I don't know. I think one of the things we've learned to do in the Ramsey household, and it's helped, because I am convinced, my wife and I were talking about this the other day, and it's not because my kids convinced my wife and i were talking about this the other day i and it's not because i'm my kids are bad they're they're excellent kids but i think uh adult children is a weird phrase to start with that's like an oxymoronic phrase to start with but raising adult children is the hardest phase of uh parenting it was much easier when they were

under my control and i could just tell them what to freaking do it was a lot easier now they have these ideas of their own and stuff i taught them to think and damned if they didn't you know oh my god it's so hard so um you know and so it's uh it's a difficult time and emotionally in that state for a lot of parents paula but i think if you're going to differentiate for a reason one of the things we've done a really good job about is we just communicate. We just say there's a difference here and here's why. And you know what? That lets all the air out of it. And you say it in front of the whole fam family, right? You can put everybody in a room and go, this is what we're doing. It's Thanksgiving, by the way, and here's what we're doing.

And it clears the air. Yeah. You know, I remember Rachel had her first big book coming out, and we know what personalities make on a big book. And so we were at Thanksgiving, and I said, hey, everybody, we're going to stop just a second here. And y'all are all in their 20s, and I'm like, Rachel's getting ready to have a great year from some hard work she's done.

And some of your years aren't going to be as great because you haven't done that same exact work. And you get the decision right now to decide whether to be jealous and petty or whether to congratulate your sister and cheer her on. Yeah. To their credit, once you said it out loud, they immediately became cheerleaders. But it took the air out of the balloon of jealousy once you say it out loud. And so it's harder to do it once somebody said it out loud. This is The Ramsey Show. Rachel, do you ever get these sketchy text messages that are like, Hey, you need to update your address and verify so we can get you the package you didn't order?

Yes, I have. George, sketchy and never trust them. And that's package you didn't order. Yes, I have, George. Sketchy and never trust them. And that's why we recommend Delete.me. They help with that. Yeah, they do. Delete.me actually goes in and removes your information from data broker websites, and it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find. That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it,

how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindelete me.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindelete me.com slash Ramsey. Make sure to check it out, you guys. Jade Warshall, number one bestselling author and Ramsey personality is my co-host. It's that time of year. In a few weeks,

we're going to be doing a special giving generosity edition of the Ramsey show. It's one of my favorite shows because we want to teach you to live like no one else so that later you can give like no one else. So here's the deal. Maybe you've been the person that was generous, and you got to see someone's face and life changed. Maybe you were on the receiving end of the generosity, and you want to tell that story, whether you know the person that gave or whether it was an anonymous gift. We don't care. We want to encourage generosity by telling great generosity stories.

So jump on to ramseysolutions.com slash ask. Put giving in the subject line. That's how you get on the radio show if you want to leave a message there. And you put giving on the subject line. We'll get you on the podcast, the YouTube show, when we're doing the giving show. We do this every Christmas time. It's one of our most popular shows. People love it because it reminds us how wonderful human beings can be out there, and often are.

It's coming up on December 18th, so send us your giving story starting today so you can live like no one else, so later you can give like no one else. So later you can give like no one else. RamseySolutions.com slash ask. Put giving in the subject line. Hannah's in Columbia, South Carolina. Hi, Hannah.

What's up? Hi, Dave. Hi, Jade. I'm so excited to talk to you guys. You too. How can we help? Okay. My question is I have been listening to you guys for about two or three months and I'm

really gung-ho. My husband and I are almost to baby steps four, five, and six. And I know you guys say to be intentional in those and do them together. So when you're in those steps, why should my husband and I not put extra money into an investment that has a 12% return instead of paying off our house that has an interest rate of 2.5? It's a great math question. and the reason is more than math. So we studied 10,167 millionaires, okay, and asked them, how did you become a millionaire? Did you inherit the money? Did you win the lotto?

Are you a country music star? Did you save and invest? How did you do it? What did you do? What's your age? What's your income? What's your career? So we could find some correlations.

And 10,000 people is enough to study to draw some real airtight research-based conclusions. And we got a lot of wonderful data from that. In other words, facts. Here's what's interesting. The number of those millionaires that said, I became a millionaire because I borrowed on my home at a lesser interest rate so that I could invest more, which is effectively what you're talking about doing. You're not borrowing on it, but you're not paying it off, which is the same thing. Okay?

The number of them that said, I delayed paying off my home so that I could invest more, and that's how I became a millionaire. You know how many of them it was out of 10,000? Not very many. Zero. We never had one tell us that, that that's how they became a millionaire,

was that they leveraged their home into investments. Isn't that interesting? And yet the math that you bring up is actually accurate. I mean, you can borrow money or you might have a mortgage at 3% and you can make 10%, 12%, maybe 14%. In the last 12 months, you can make 30% on an S&P okay which is not normal but but you know you're 12 percent I don't argue with it all the difference is is that um you're going to be paying taxes on the money uh unless you're investing it into a Roth and um

you know you you've also taken more risk because you're home. So something happens to people when they get their home paid off, the freedom that they sense in their relationships and their careers causes them to prosper more and faster than the difference in the interest rates. And so that's the only explanation I've got for it and i will tell you this here's an interesting thing you can do go ahead and pay off your house and if you hate it just go get another mortgage that's where i am i really want to do that but i'm also married to an accountant who's like he knows the math and well here's the problem let me submit to him that he's doing a naive primitive incomplete math formula because his math formula does not include

risk and his math formula does not include taxes and if he can quantify the risk exactly and put it into a math formula he's better guy than i, and I'm a math nerd from now on. But it is a real risk because we can all honestly say the more debt you have, the more risk you have. Agreed? Yes. And to not mathematically factor that into his formula makes his formula naive and incomplete.

So I don't care if he's an accountant. He's wrong. Right. That's the thing. I mean, now how do you convince him of that? I don't know. That's a different story. You've been convincing him he's wrong since you got married, so maybe you can work on it. Yeah. My biggest question for him would be, what is his ultimate goal and why are you guys doing this? His ultimate goal is to build wealth and he thinks he's leveraging the money right am i right yes yes you are right yeah but i guess my question is is it a let's say let's say he says my goal is to have eight million dollars right is it a

time frame is it a time frame he's so caught up on or is there a way that you can present that argument and say hey we can still get there we're just going there in this order and this is going to give me more peace do you see what i'm saying yeah and i i um he was trained by the same people i was trained by my finance professor was broke what's wrong with that picture a broke finance professor is like a shop teacher with missing fingers. My grandpa was not broke, and he was also an accountant. The reason he was not broke, though, is he avoided debt like the plague because he was a child of the Great Depression. And he had no debt, no debt, no debt, no debt, no way, no debt. When I started going in debt like a crazy man to buy houses in my 20s,

he said, I'm going to throw you out of the family. You couldn't be one of ours. You're too dumb. He didn't say that, but he made me feel that. So there you go. But yeah, I mean, because it's just so polar opposite of what that generation that had common sense lived. So the problem, Hannah, is your husband was trained by a broke finance professor

to believe an incomplete, inaccurate math formula. And you can play this back for him. But, and Jane, you know, it's an interesting conversation because we get this question like once a week, right? And when I first started this journey, this journey being common sense money, I've got a finance degree. I've got letters and licenses of all kinds after my name.

It says I'm supposed to know something about money, but I'm 28 years old and I'm bankrupt because I borrowed too dead gum much money and I'm an idiot. And I got the opportunity to start over. My wife would have left, but she didn't have a car. I mean, it was awful, horrible. And I was a brand new christian and so i started learning from this guy named larry burkett that the bible had financial principles and i read in there the borrower is slave to the lender and then i read in there he who is impulsive exalts folly

and then i read in there the blessings and cursings to the house of israel as they cross the jordan after moses has led them in the wilderness the blessings are cursings to the house of Israel as they crossed the Jordan after Moses has led them in the wilderness. The blessings are you will be so wealthy you will be a lender. The cursings are you will be a borrower. Every single thing in Scripture that I was reading as a brand-new believer was negative about debt. And yet my intellect and academics all told me that to borrow money, like her husband the accountant.

And I struggled with exactly the same thing but i made the decision in those days on the basis of faith i just said okay i tried it i tried it the uh academic way i went broke and i'm gonna try this bible stuff and it's common sense now years later i discover, they left out risk. They let the math formulas incomplete. These academics aren't so dadgum smart after all. Who knew? This is The Ramsey Show.

Jade Walsh, all Ramsey personality is my co-host today. I'm Dave Ramsey, your host. The Ramsey Show question of the day is brought to you by Y-Refi. If you've made student loan mistakes with zeros on the end, well, we're not judging you. We're here to help you, and we're saying you need to do something about it. Contact Y-Refi if you have a defaulted private student loan. They'll reset the whole thing. It's unbelievable what they can do for you. So go to Yrefy, 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 Brody in Maryland. He says, is it unfair for me to feel angry that my wife wants a bigger house? We bought a 1400 square

foot house last April. I sold all four of my investment properties that I worked very hard for to completely pay off our debt, including the new house. Our house is a three bedroom, two bath ranch with a backyard on a quiet street and it's in a good school district. So much sacrifice and saving

went into making this happen. Now she wants a bigger house, even though she said she wanted this particular house before we put the offer in. I don't see how I can make this happen without going into debt again, and I will not go back into debt. Oh, this is juicy. Listen, here's the thing. I do think that some people's personalities, because you don't talk about any type of pay raise or situation where you guys' lifestyle has changed drastically. But I do think there's some people that the goalpost is constantly moving, right? It's like, if I just get this, I'll be happy. And then

they get that thing and they're not happy. Or if I just get this, I'll be content. And then it happens and they're not content because things don't make you happy and things don't make you content. You know, I think that they're fun,'t they don't fill that void and you can buy fun but you can't buy happiness yeah and you can't buy contentment and if you're on social media which she might be every single day scrolling through and looking at what the influences are doing and looking at what their friends you know their friends houses or she's spending all night watching hgtv it is very difficult um for some people to kind of go well that's them and that's okay my life is fine and truly i think that that's what this is i think she's got a contentment issue exactly sidebar what you stated there i

just saw an article the other day that um the more hours you spend on social media the typical the court there's a direct correlation to the more credit card debt you have oh really i'd love to see that i know there is and the more overspending you do because you know i i do it and i have the money but i'm like looking at some gun thing and i'm like oh i need one of those yeah but if i had stayed off of that you never even known it was there and you know but so i know other people do it and i teach this crap so you know i mean it's like golly if i'm doing it that's okay it's got to be so okay yeah here's what happened brody you guys need to reset your marriage relationship

this is not about a 1400 square foot, and it's not about you being angry. You are acting like the daddy, and she's acting like daddy's little princess. Uh-oh. You know, I hear that again. And daddy sold everything and did everything and sacrificed and worked his fingers to the bone, and what did he get? Bony fingers.

And he got a house, and he's real proud of the house, and now she walks in and goes, yeah there's the wallpaper yeah and so we need to reset this and instead let's be two like grown-ups so the conversation i'm going to have is and actually we had it at our house but in a little different way when we were about cheryl's age probably um i'll tell you about ours in a second. But the conversation I'm going to have is, okay, we are going to get aligned on our goals. Yeah. My goal is not to perpetually make an unhappy person happy. I am not going to get on that treadmill.

We, you're a grown woman. I'm a grown man. We're going to sit down together and here's one of mine. Okay. I don't borrow money. Period. Here's another one of mine. I like to provide nice things for my wife.

Here's another one of mine. These are what you might say, Brody. Okay. And she's saying well i want a house as nice as my friends okay what can we do to get that uh you don't work you could work you don't work much you could work more uh you could quit coach bagging it and we might save that money towards a house. I mean, what are we going to do as two grown up people to responsibly? Because I'm all in.

I put all my chips in the table. I sold off everything I had to buy this house for us. And what you did, though, was you did that without her. She was not aligned to that she was giving you lip service but this was not her idea it was yours yeah and now now you're surprised that she's unhappy of your plan that did not her include her so this is like i gotta tell you know what i about 10 years i've been married 43 years about 10 years into marriage i don't buy sharon jewelry any more that she hasn't seen tell us why because i picked out ugly crap i know

according to her but i spent a lot of my beautiful money on her ugly crap. And then she didn't. She's like, oh, I wouldn't. I wouldn't about that. And I'm like, oh, geez. Well, let's just not do that again. So I don't mind if Sharon has. I mean, she's got earrings the size of a headlight, but she picked them out. And then she says they're heavy.

They're that big. OK. And I'm like, that's ridiculous. I'm like, OK, it's a good problem to have okay just get your little earlobes and do some earlobe lifts start doing some workouts there in the gym because you picked them out so see that's the difference she this girl's not involved in this well yeah you can tell by the the language i sold all of my investment so much sacrifice yeah he's the only one he feels like he's the

only one sacrificing you can tell by the language whether but it's a paternal thing rather than a equal thing yeah yeah you can hear it i think we got to reset and go we're not doing anywhere from here we're not making any major decisions without both of us involved and i learned that after i went broke because i made a lot of decisions that were stupid without talking to my wife proverbs 31 says who can find a virtuous wife for her worth is far above rubies the heart of her husband safely trusts her and here's my favorite part he will have no lack of gain and it's not in the bible but it might be in one version like second hesitations yeah right after no lack of gain she no longer says i told you so oh i kind of like she can't say that anymore i like being able to say that i know but you can't say that when you're in on the

decision all you can say is we together made a dumb butt decision that's all you can say from this point forward and that that's it you can't say you're an idiot you can't do that anymore because now you have to use plural it's to change your pronouns we are idiots we did this right and so that's what's going on here dude you've got to reset uh this idea you have put your little superman cape up of you're the papa and you're the provider and all this stuff and um she's just a little woman and you're gonna you're never gonna make scarlet o'hara happy it's not gonna happen so um she's gonna get on the same page and be like a grown woman and stuff

and then she'll become happy yeah it's a weird balance of power it's a big deal man it's a big deal this alignment in marriage is one of the things we find all the time in people's ability to get out of debt. They succeed in their careers at a greater rate and their ability to build wealth because they're aligned on sacrificing. And they make decisions together. The first time we did that after going broke was we finally saved up a little bit of money and I had $10,000. Sharon was driving a blue three-tone Astro van. You remember those? Oh, 100%. Completely ugly. The carpet was covered in toddler goldfish from the third kid. And it was nasty. This was a bad car. It was an embarrassing vehicle. When they first came out, they were all right.

Well, this was not first come out. And she's like, I need a better car. We need to move up to a Suburban. And I had $10,000 or $15,000 saved at the company. I was getting ready to do this investment. We were going to buy this thing. And I was going to make $100,000 with this $15,000 down here. And she's like, we need to do a car.

And you know what? We did both, but we did the car first. And then we did the company. And it turns out now all these years later, it was okay. But in the moment, aligning on that with two grownups was a big deal. It's a big deal. 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,

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Jade Walshaw, Ramsey personality, number one best-selling author of the book Money's Not a Math Problem. She's my co-host today. Open phones here at 888-825-5225. Scott's in Las Vegas. Hey, Scott, what's up? Hi, how are you, Dave? Long-time listener.

I really appreciate you guys taking my call. Sure. I came across a question today for investing purposes on my Roth 401k. My coworkers and I were looking for next year and looking at setting things up, and a question came up about if I were to put, let's say, 15% of my income and I hit the IRS cap, let's say October or November, will that negatively affect how my company match for the remainder of the year where I'm not actually getting any money?

I don't know if it's a number that's going to be a fixed number regardless. Will the company's 6% match be the same if I hit it in October or if I were to spread it out over smaller increments throughout the 26 paychecks? That's a question for your company, your HR team. That's not a regulation issue. My own company would be how they would be able to. It's not a regulation issue. Because I didn't know if it was a way to be able to calculate that,

to be able to look at even previous. Because a couple years I had hit that number in October, and then the last two years, I was going to have a little bit more money in my pocket throughout the course, and I spread it out with a little bit lower number and let it hit the last paycheck in December. And I didn't know if that was going to be from a negative impact if I were to just... I think you could look at the total for that year,

total invested by you, and then the total match match and divide it and tell what the percentage was right right sure exactly and that would tell you what that would tell you what your company does yeah I mean some companies match up to a certain amount amount some companies match all the way through um we match a percentage regardless of what you put in, regardless of when you put it in. And so, I mean, I've got some high-income earners that fully fund theirs in the first quarter. Right. And then they just don't have that because they max it out completely.

They're not allowed to put any more than that in. And so, not by us but by regulation and then we match that as they do it whenever they do it whatever they do same but that's a company decision as to how the match is done um and if you have to drag it out to get the full match i would drag it out make sense if you need to talk to them and find out how they distribute that money yeah if you need to do 12 even months to get the full match then do the 12 even months because the match is more valuable than the early portion of the investing but the other that brings up another interesting thing jade that sometimes people ask is should i you know should i spread my personal

roth over 12 months or just do it in jan you know you should do it in January is what is the answer mathematically because the entire amount is earning throughout the entire year rather than a portion of it earning each month more that's right and so well what if the market went down well if the market goes down none of this works so it only works when it's going up and overall we know it's going to go up. It could go up or down in the short term. But yeah, so Scott, that's an HR and payroll and whoever's managing your 401k at your company question.

And you could get a hint before you even call them by looking at the percentage they gave or the dollars they gave last year as a percentage of what you put in last year and see if that matches their standard match rate and that would tell you you know if you're looking like six percent then you go okay you know i put in ten thousand dollars irregularly but they still put in you know six percent of that six hundred bucks and so um you know or whatever the number is but

that's you can still look at that and figure that out so very cool very cool good stuff man that's a great question by the way and here's the neat thing about all this people like him it's not the answer to this technical question that matters what matters is he's actually thinking about it i was going to say that you know most people don't think about it they're not yeah they don't think about it so the fact that he's maxing it out the fact that he's thinking thinking about it. I was going to say that, you know, people don't think about it. They're not. Yeah, they don't think about it. So the fact that he's maxing it out, the fact that he's thinking through that is really, really great. Yeah, really. The intentionality, you know, one of the things I've got a friend that his dad was the governor of Tennessee in the 1950s. OK, and so he's in his 70s now, but he was a little kid in short pants in the governor's mansion in the 1950s.

And I had a great discussion with him one night. He said the discussion in our family table growing up was politics. And he said, you know what rich people talk about at the family table generosity and investing and value purchases not cheapo purchases all the important things you can do with money long-term decision and so a rich kid grows up with a silver spoon because their parents got rich because they were concentrating on money, not obsessed by it, not worshiping it. Like my friend's family didn't worship politics. They weren't obsessed by it, but they were in that world. It's what they did.

And it made me realize that's how, you know, if you grow up, I've got a cousin who's a car dealer, and guess what? He owns a bunch of cars. I wonder why. Yeah, I think you end up talking about the things that are of value to you in your life, whether it's your religious beliefs, moral beliefs, hobbies, whatever that is. That's what you talk about. That's what you pass down.

And so you need to be thoughtful about that. But that's the same thing of Scott being intentional. What's him and his friends sitting around the lunch table talking about? Not other people's careers carrying a football well let me tell you about their careers and how they're going to build well i think that's one of the i mean we kind of talked about this early but if you're if you're on social media and you know more about p diddy and you know more about other celebrities finances and you know more about what you know so-and-so is driving and you don't even know about your own stuff you don't know the state of your own affairs you don't care that much about your own financial situation about your own relationships that's a

yeah it's a red flag it's backwards it really is more into pop culture than your own culture i was at a titans football game one time a long long time ago and um the seats were not great and the guy in front of us um was a large man spacious without a shirt oh and had painted his his big self blue with a big titan thing on his chest and he yelled and screamed like the world was coming to an end on every play he cussed the coach you didn't like that and on every play he cussed the players and i told my wife i said if he was as enthusiastic about his career or his marriage as he is about watching these young kids down here playing football right

he would he would probably have a good life wrong wrong dose you know yeah you got to channel it to the right cause i mean i'm sorry i get it if you're in college and you and your buddies all have too many beers and paint letters on your chest and take your clothes off or whatever. I get that. Take your shirts off anyway. I get that. I don't get 56 years old. Ooh.

Yeah. And obese. I don't get that one. Okay. It's just gross. All right. I'm just saying it. Just saying it for all the rest of us out there.

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slash budget at chministries.org slash budget. Jade Walshaw, Ramsey personality is my co-host today. Sydney is in Cincinnati, Ohio. Hi, Sydney. Welcome to The Ramsey Show. Hi. Hi. Thanks for taking my call. Sure.

What's up? So I'm kind of new to the Dave Ramsey universe, but I am currently working through steps, currently on step three. Cool. And earlier this year, I got President Biden's student loan forgiveness and a refund check with that. So I am completely consumer debt-free outside of my mortgage. Okay, stop just a second.

Stop just a second because President Biden has issued several press releases, but all of the debt forgiveness was all programs that were already in existence. He took credit for them, but they were already there. Aside from that, what was the forgiveness that you got? What type? What was the situation? Just my student loans. My school was deemed predatory or whatever.

That's been in place for 20 years yeah schools that are predatory and go broke the student loans are forgiven for the last 20 years and you should by the way should be and that is a standard forget so so the student loan that you took out with this predatory trade school is what they typically are or some kind of online school or something like that they they took out they gave you student loans they were federally insured student loans and the federal government forgave those because they deemed the school to be predatory right yep okay so how much did how much did you had you paid into it and they gave you that back? That's what the refund check was? Yes. And so I used that to pay off my car, my 401k loan that I used to do my mortgage. I know that's like against the rules.

I learned that now. You know, I didn't do that then. That's okay. That's okay. And paid off my credit card. So I've been consumer debt free all year or since then. Except the 401k. No, I paid that off as well. Oh, good you get back way to go how much was it i got like 16 17 000 back okay okay and

that cleared up some of the remainder mess all right so let me think here i you pay so all right so the student loan was taken out the money was given to the predatory school. The predatory school goes broke. You are forgiven the student loan, and they refunded you what you had paid on the student loan. I don't think that type of loan forgiveness is taxable. Most loan forgiveness is taxable, but this is a different program because you did not actually receive the money here.

The money you received back was your money you paid it paid against the loan yeah that was already your money yeah so if you take out a credit card loan and you go buy something for yourself or you put the money in your pocket right and then they forgive that that's taxable but you got the benefit of that you did not get any benefit here i don't think this is taxable but you're going to have to check with a tax professional to be sure yeah that's what i wanted to see if you guys had any insight on because i'm currently getting laid off and my plan is to file my taxes like first thing next year to help bridge any potential good employment i'm expecting to run into but now i'm like if i'm going to get taxed on that do i wait i don't i don't think you're going to get taxed on that before then

i don't think you're going to here's the way let's get you a pure answer here's the way to do it go to ramsey solutions.com and we have endorsed, we call endorsed local providers. They're people that we have vetted and we are comfortable with their professionalism and the quality of care that they give. One of them is in the area of tax. So you're looking for a tax ELP, endorsed local provider at RamseySolutions.com in your area of Cincinnati. There will be one or two or three of them. Okay. Holler at one of them and talk to them about preparing your taxes and ask them on the phone if this type of loan forgiveness is taxable. Tell them Dave said he doesn't think it is, but for them to double check it. Yeah. And I see something on here that says, and I don't know

if this was a part of American Rescue because this was kind of in place before that no this is not american rescue yeah but it says that if they're discharged between january 1st and december 31st of 2025 they are not taxable so you shall see okay i don't think you're gonna get taxed on this one okay okay good question good question and lesson learned politics aside politicians tend to take credit for things they didn't do it's part of being a politician and like when i was interviewing president trump uh before the election um one of the things i told him was people like me that own small businesses and actually do create jobs, it kind of pisses us off when you politicians say you create jobs because you politicians don't create nothing. All you can do is create an environment for those of us that actually create jobs to function.

And he kind of laughed and goes, well, that's right. But then, you know, the next week he comes out and talks about all the jobs he created. But that's politicians, and Biden didn't forgive these loans either this this program has been in place god since student loans have been there predatory lending so like a truck driving school that goes broke or a tech school you go get a computer certification but they're just are some of times they're like hair care or a massage therapist or something like that and they they'll get student loans going on these things and they can gin them up and they make a ton of money and then they turn the key and walk away with all the money in their pocket they're they're scams their fronts is what

they are and they pop up and then they die they pop up and then daytime television if you're watching yeah judge mathis or you know all, I feel like that's all that's on TV are these, I don't want to call them education institutes, but you know. Well, that's what they call themselves. Yeah. And so we would be doing it as a Saturday Night Live skit. But the federal student loan forgiveness has been there for those types of situations for at least 20 years, at least. Well, listen listen if you really want to get technical it's never an administration forgiving debt it's taxpayers forgiving your debt we don't get the choice we just get the bill that's what i'm saying like let's let's let's put the check on who is

really yeah that's it that's for sure yeah anytime the government what was it reagan said if the government says if somebody says i'm from the government and i'm here to help yeah run yeah that's that's the bottom line there and that's either party i'll just tell you so sure yeah this is um but that that that's the thing to remember and just um either way the good news is by the way if you pat if someone passed away in your family the student loans are forgiven it's been that way 30 years if someone is permanently disabled their student loans are forgiven it's been that way for 30 years okay that that's not a new program it's been since i've been on the air you know that we've been talking about this so that that's the stuff but either way

the you do have to deal with the tax question. So Sydney's smart to ask that question about the taxes. I think, I'm pretty sure you're not going to get taxed, but don't take Dave Ramsey's tax advice. I suck at it. Yeah, here it is. I found it. Borrower Defense. So this is a program that eliminates federal student loan belonging to borrowers who their college misled them or if their school engaged in misconduct, they violated any state laws the irs uh has issued notices for these and they are not taxable as income okay there you go that's according to google so also also check that out because it's on the internet and abraham lincoln said everything on the internet's true so it's a good place to start yeah that's the thing you got to remember

but that's that's probably at you probably you found that on the irs site or no this is a a article from yahoo finance yeah so once again please don't take their advice or mine please get a professional to be sure but it sounds like that we're onto something there sounds like we're on the right track so uh good stuff very very cool all right ladies and gentlemen that's how we do it listen the way the student loans go away jade how'd your student loans go away work oh there's that it's got a work it's a new program it's a brand new program it's out it's called w-o-r-k yeah it's called you wake up in the morning you go to work and you stay at work all day and then you take the money and you pay off your loans

for a long time you ought to get a radio show you don't have a you don't do a whole lot other in between you just work and pay off the loans and work and pay off the loans my grandmother used to say there's a great place to go when you're broke. To work. I love it. This is The Ramsey Show. Jade Walsh, all Ramsey personality. Number one bestselling author is my co-host today.

In the lobby of Ramsey Solutions on the debt-free stage. Alex and Brenda are with us. Hey, guys, how are you? Good. How are you, Seth? Welcome, welcome. Where do you all live? We're in Parker, Colorado, just a little bit south of Denver. Oh, cool.

Well, welcome. Good to have you. All the way over to Nashville to do a debt-free scream. How much have you paid off? So, Dave, we paid off $305,000, or $305305,450. Wow. Sorry. How long did that take? Three years, two months, and 13 days. Three years and two months. Wow. And your range of income during that time? Our range of income was $148,000 to $240,000. Wow. Nice jump. What do y'all do for a living? I am full-time with the Colorado Army National Guard.

And I'm a civilian with the Army National Guard as a cost accountant. Ah, very good. Very good. Well, thanks for your service. Well done, you guys. Good work. Very fun. What kind of debt was this, 305,000?

It was our mortgage. I knew it. Paid off your house. I can tell by the smile. I love it. it wow you guys are so weird i love it weirdos good work how much is this house worth um 850 000 how old are you two we're in our early 30s wow and you have a paid for 850 000 house yes sir man how much in your nest egg in your 401ks in retirement um right around 300 as of right now wow wow so you're millionaires in

your early 30s we are i'm so proud of you thank you look at you too way to go man when you got married how broke were you um we are actually fairly new to this marriage we got married about four years ago so we were both kind of on this journey as singles okay okay yeah all right so you just took off and get this quick then well tell us your Ramsey story how'd you get plugged into this three years and two months ago well she started a long time before i did um i was kind of messing around and then she gave me uh your um total money makeover when we were deciding if we were going to date or not i was like read this book and let's talk about it so i was talking you better write i have the right answers on the next dinner so it was funny because i read it and i was like oh i'm kind of doing a lot of stuff anyways i kind of got fed up with being broke and then i was like

oh this is easy enough so being kind of a money person anyways i was like all right well this is simple i read the book i had the seven steps and i was just like okay let's do it here we go i love it very cool very cool so you guys met at the national guard i assume yes yes okay very good and man that's a great situation you're in. After just four years of marriage in your early 30s. But it sounds like, Brenda, you had a head start on it. Yes, I grew up with parents who didn't do debt. And so when I moved out, I didn't do debt.

I didn't have a hole to dig out of. Did y'all buy the house after marriage? We did. As soon as we got married, we became a family of five. We had his son and my two kids the day we got married. So I lived in a tiny little house, and we went out, and we put over 50% down on our house and decided just to kick it. So we made this kind of like our baby step two.

Okay. Just took off running with it. Pretty intense then. Yes. A big part of this was that we wanted to teach FPU, which we had done in the past, and we just actually finished doing a week ago. Nice.

Yeah, we just finished our second course. So we wanted to kind of be like, practice what you preach. And because we didn't have a step two together, we kind of treated, you know, paying off the mortgage like our step two, even though it's not exactly advised. Yeah, that's all right. I get it. Alex, what did you pay off beforehand? Because for you, that was kind of the change. I was working a credit card and my car paying those off and I

think together that was 19,000 okay wow so Brenda put the screws to it yeah she said not allowed very cool well thanks for thanks for teaching Financial Peace University that had to be a great class you guys had to be like cloud nine. Yeah, pretty excited. Yeah. We taught it once, and then we took the most motivated couple that was there, and we were their co-leaders the next time around. So this last time that we just finished. Yeah, Matthew and Amber, they were our co-leaders this time. They did great.

Yeah, I love it. Build to build the next generation of coordinators. Exactly. Good for you. Good for you. All right, when you're coordinating a class or when someone asks how you're a millionaire at age early 30s with a paid for $850,000 house and you don't make $2 million a year either. When someone asks, how did you do that? What do you

tell them the key to getting out of debt is? Hard work for sure. I think between the two of us, we had about 13 jobs. We each had a solid job and then we took on several side jobs. You can tell you what most of them were. So not all the same time, but over the three years they were doing this, I worked at Home Depot for a summer. We both worked delivering packages for Amazon. I was a tax assistant at our CPA office. We both did landscaping. I did Uber and Lyft. I was a reserv assistant at our CPA office. We both did landscaping. I did Uber and Lyft. I was a reservist in National Guard.

I did handyman work. She sold items on Nextdoor. So it was a whole bunch of, not all at once, but like there was always something going on just to kind of keep it new and different. So I love that. So what happens next? You've got a paid for house. You don't have a payment in the world. What are you planning um i think our next thing is probably cars okay very old very used cars what are you gonna get um nothing new but new to us probably a newish or newer minivan and

then he needs a nicer commuter car he's driving an 06 car with very many miles something from this decade so yeah i love that i first want to move up to this decade yes it's a good move i like that that's good very cool well i mean you drove those beaters and now you'll never have to again make sure you take pictures of them we will before they leave because i i i've got pictures of every car i owned except one and i really wish i had that one is it the original no it's one of those beaters that i had somehow i managed to not that was back when you know when we actually had film and stuff like that in cameras so anyway anyway side sidebar but yeah good good job you guys who was cheering you on as you went oh we have a whole list we have a ton of cheerleaders so matthew and amber like i

mentioned are our co-hosts on Financial Peace. It's a little cheat sheet. It's okay to look at it. You can look at it. I look at them all the time. My youngest brother Lloyd and his wife Haley are on this journey, and they're right behind us in Baby Step 2. Paul and Felicity and Sean and Rosa are in our class in FPU,

cheering us along and also learning along with us. And then several coworkers, we have Ms. Cicely, Ms. Miranda, Ms. Alita, and Ms. Jennifer. Her mother, Linda. Did you have anybody telling you not to do this? A couple people kept saying we're crazy. Yeah, probably. I don't have anybody specific. What was the most lucrative side hustle?

One that made the most money? Probably Amazon Flex just because they give you blocks of time, and if you finish it early, you get paid for that full block whether or that full block whether or not so we would take our older kids along with us and they would throw us packages from the back we could finish a three-hour route in an hour and a half and then go pick up another one. Which one did you dislike the most? Probably Amazon Flex. It was a lot of work. There were days that we would be up at 3 30 in the morning we'd go well actually it was earlier than that we'd be there at 3 3030 in the morning. We'd go, well, actually it was earlier than that. We'd be there at 3.30. And then we'd go to our real jobs at 6.37.

And then sometimes after that, we wanted both of us to pick up on our shifts. So it was crazy. Both of us sometimes work a 90-hour plus weeks. Was it worth it? It was totally worth it. The grass really does feel different under your feet. Yeah, tell somebody why. Because people call in all the time and they're like, you know, I've got a low interest rate.

They feel like it's not worth it to them. But here you are doing it and you sacrifice to do it I'm a Simplifier kind of person. So it's just one less thing to worry about and now we really get to you know Put it towards our retirement accounts. So we're able to max out our Roths and I think five years ago i was looking my you know net amounts and i was like i wasn't even making this amount you know five years ago and that's after putting in you know max roth contributions and having other things come out so it's just uh it's a big thing out of the way and now i get to stay home oh wow that's a

big one i'm not yet but i'm in the process oh wow very good well i guess so you're a millionaire that's neat love it i'm so proud of y'all you're amazing i mean in their early 30s so well done all right are the kiddos gonna scream with you they are all right let's get them up here introduce them give us their names and ages, we might have a sad one. Uh-oh. Did we lose one? Here they come. Oh, the little one's sad. That's okay. Oh, she's cute.

Oh, she's cute. That dress. Oh, my God. That's all right. How? That's perfect. All right. Alex and Brenda, Addie, Liam, Logan, and Anna Lee, 305,000.

Count it down. Let's hear a debt-free scream. All right. Three, two, and Anna Lee, 305,000. Count it down. Let's hear a debt-free scream. All right, three, two, one. We're debt-free. Don't scare the little one to death. That's good. Baby Steps millionaires in their early 30s. What'd they do?

Follow the stuff we teach. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball.

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That's what they call it. Grand Rapids is in Michigan, it is. Dan is there. Hi, Dan. How are you? Hey, Dave. Doing good. How are you doing today?

Better than I deserve. What's up? Okay. Make a long story short, I'm in between baby step one and baby step two. You know, things are going good. Stuff breaks. Spend my $1,000. Got to rebuild baby step one.

I got my girlfriend. She's kind of stuck with me, too. We want to be married and have a family. She has $21,000 in credit card debt. She found this company accredited debt relief. They offered us a payment of $342 a month for 48 months.

That's to pay off the credit cards. The problem is that's only $16,400. I don't understand how this could work. Okay. Because it's the same as filing bankruptcy. It's going to destroy her credit. Here's the way they work.

Stay away from them. Stay away from them, but here's why, okay? The way they work is when you sign up with them, they take over all of your payments, and the first thing they do is they stop making any payments, and they let all the credit cards go into default if they're not there already. And so they go into default, and the credit card companies then will settle a bad debt.

Now, she will be in collections on every one of them, and then they'll settle the bad debt for a lesser amount than is owed and set up payments on that. And that's how they know that they can get you a sixteen thousand dollar deal by the way if you did this yourself and just quit paying for a year which i don't recommend same thing would happen then you can call them and settle for probably a quarter on the dollar so you probably settle all this for five or six thousand bucks but that is also not paying your bill when you're able to number one number

two you've completely destroyed your credit i mean nasty bad nasty you got a bunch of outstanding bad debt at that point and that's the way these people work and it basically does the same thing to your uh credit as filing chapter 13 bankruptcy does. You can do the same thing with chapter 13 bankruptcy. You can file with chapter 13 bankruptcy. If you qualify for the bankruptcy under guidelines, then you can pay a percentage, not 100%, but you could pay, in this case, you said 16 out of 21, right? Yeah. Yeah, you could pay. So you could pay 75 cents on the dollar. You could agree to pay 75% to my unsecured creditors in my Chapter 13. That's not 48 months.

That's 60 months. But they could do the exact same thing there, and it'll do the exact same thing to her credit, only technically she's filed for bankruptcy, and the other one she didn't technically file for bankruptcy. But it does the same amount of damage, if not more, to your reputation and to the process. Plus, you're screwed.

You're in debt $21,000 for 48, for four years, when you could have paid it off by next Christmas working five jobs. Yeah, why can't you just work more and pay it off? Tell us more about that. What's the income? I work for the railroad. I'm on 12s right now, which is legally the most I can work. She's a teacher, and she's starting to do Amazon Flex.

She has a daughter. I love her to death. What does she teach? She's like the director of a bunch of different daycares. She used to be a daycare teacher, but she's now the director of a bunch of those daycares. She used to be a daycare teacher, but she's now like the director of a bunch of those. She makes about $55,000 a year. Okay. All right.

Now that I've explained to you and answered your question what it does, I'll give you a suggestion rather than doing that, okay? And what I'll do is I'm going to give you Financial Peace University and EveryDollarPlus for both of you. She's going to have her account. You're going to have your account because you're not married. Okay? And I want both of you to get on a detailed, tight budget.

Don't spend any money on anything. Live on beans and rice. No eating out. No vacations. And working extra. If she has a teaching degree and a talent in a particular subject like math or English, she can do tutoring and make more than Amazon Flex. Okay. If she can get some students from the local elementary or local junior high or whatever,

and she teaches math in the afternoons or the math in the evenings after she gets home, I mean, you can make $30 to $50 an hour doing that. Yeah, child care, too. And your kids sit in the other room while you're doing this. They come to your house. That's a great idea. Yeah, I've got a friend that's a reading specialist that makes bank while her kids sit in the other room on the side.

And, I mean, it's serious money there because they got reading problems and man she's wow it's really cool stuff so anyway yeah that's what i would add to this and say all right we're going to increase our income we're going to tighten down everything we're going to have a new thought we're going to get all these credit cards tonight and have plastic surgery and um we're going to pay them at a hundred percent and we're gonna pay them so fast that they're in our rearview mirror and we get a life but 48 months man that's like ridiculous that's like saying i'm going to jail you get to go to jail for four years and you barely just get to you know you bring the food and slide it under the bars.

You know, no, thank you. I don't want to live like that. I want to get, oh, jeez, no, man. The goal needs to be if you can find an extra, if you can make a goal that we're going to make or she's going to make $1,700 extra dollars, find it every single month. What does it look like? Is it Amazon Flex? Is it tutoring?

That pays it off in one year? Yeah. Is it child care? And is it a cut in the budget? makes 55 already yeah yeah so um yeah that that's the kind of stuff we're doing dan so we're going to help you with that um it's the hard way but it's the fast way it's deep sacrifice but it's in your rearview mirror and you get to have a great life on the other side of it versus signing up for a long slug through the mud that's what we're doing i don't i'll pat and at the end of it at the end of the story you're still screwed because you just completely destroyed everything as far as credit goes so she's

probably gonna have some dings on her credit probably already does but nothing like what you'd be signing up for if you go to those type of a company. So we do not recommend them at all. Hang on the line. The team will pick up, and we will get you signed up for Financial Peace University. Get her signed up. You guys, you can go through the class together, but you need your own separate budgets because you're not married yet, and you keep your finances separate until you're married. So good question, sir.

I appreciate you checking on her behalf. Wow. Those things are, you see them on cable TV. Yeah. And, man, there's a couple of them have been fined, like 400. I mean, one of them got fined, like, it can't be 400 million. Was that the fine? There's some ridiculous one that uh tom selleck endorsed and

the federal trade commission hammered them with fines a couple of years ago because they just they're they're it's just a scummy side of the world yeah it's scummy and i don't i don't like situations where you take control from you and give it to someone else to do things on your behalf and what they're doing is acting like i didn't pay my bill so that they can get a discount yeah i mean that in trashing my stuff in the meantime but we're we're in the uh we're in the debt relief business just like dave ramsey uh no you're not it's not not even not even close not even close to the same thing so you you got to stay away from those things. And they call themselves also debt consolidation.

Yeah. And it's not debt consolidation at all. You're not consolidating debt. Consolidating debt is when you get one debt and pay off all the others with the one debt. Well, you don't pay it off. You move it to the one debt. But that's like a home equity loan. That's debt consolidation.

But not paying them and you paying these goobers one payment, that's not consolidation at all. And it's really not debt relief. No, it's not relief. It's, well, at the end, I guess it is in one sense, but I wonder what the percentage of people that complete it is. Probably pretty low. That's a good question. That'd be interesting to look at. Yeah, you don't finish it. You're really screwed. That puts us out of the Ramsey Show and the books. 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. I'm Dave Ramsey, your host, Jade Walshaw, Ramsey Personality No. 1,

best-selling author of the book, Money is Not a Math Problem. She's my co-host today. Thank you for joining us. Open phones at 888-825-5225. Christina is with us in New Jersey. Hi, Christina. How are you? Hi. How are you? Hi. How are you, Dave?

Better than I deserve. How can I help? So thank you for taking my call. I'm a huge fan. I just got done finishing the Financial Peace University with my church, and I actually am starting to conquer my debt, except my debt is a little in over my head. I haven't even started an emergency fund yet.

I'm upside down a little bit in my lease. Well, I shouldn't say upside down. I guess what I'm trying to say is I leased a car. My car payment is like $400. I currently have two fixed incomes, and I'm trying to rehabilitate myself back into the workforce with a full-time job, making more money because I'm in college now. But now isn't going to help me in case, God forbid, something happens, I'm a single mom. My daughter is 17. She's going to be 18 soon, which will stop one of my incomes.

So my question to you, hopefully you can help me, is how do I tackle my debt with the fixed income that I'm on now? What is the fixed income? Child support's one of them. Yes, child support is one. Do you want me to tell the amount yeah okay one thousand four hundred and ninety five dollars and my second income is disability which is one thousand three hundred and sixty four dollars and that's uh social security disability

yes that's correct what's the nature of your disability? So I actually had a disectomy and a fusion in my neck. So I'd have four-level fusion. I had to go out on disability because I was unable to do the work I was doing. But I can't. Here's the catch. I can't work. You can't work above a certain amount of money because they'll kick you off disability. And because I have a daughter, I chose, um,

I really did choose to just stay home with her. I'm on assistance right now for my rent. So my rent is $7.98 a month. But I can't live like this, and I won't, for too long because I am in college. What are you studying in college? So I was going to do social work, but I changed it because I don't want to be struggling and living on beans and rice, as you guys say. So I changed it to business administration. What type of work can you do? I mean, are you limited because of your disability? I can't lift anything heavy. Well, I used to work in a bank,

and we used to have to definitely, there were some things that I had to do that required me to lift a lot of change, a lot of coin. I was the vault custodian. So something like that wouldn't work for you? No, not anymore. And it wasn't even enough income. Right.

I had a baby. So your daughter is 18? She's 17 now. When did she turn 18? April. Okay, so you're about to lose half of your income, essentially. More than half. More than half, yeah.

That is correct. And who's paying for college? So, thank God, right now we have child support, but her dad, who is an awesome dad, he's able to definitely cover all of that. We will get a little financial aid. I'm not talking about your college. Oh, financial aid because he lives with me oh financial aid thank god and i have grants and scholarships yeah you qualify for pale okay and when are you finished yes sir so i have another two years because i'm i'm like literally now just finishing my associates so what is your plan in april eat? So the only thing I could do is work part

time to supplement that income back. So my question is, what do you suppose I do? I'm going to get a part-time job. Like there's a hands down, no, no, no worries about that. I am, I am eager. Um, I won't lose any assistance. I'll still be able to stay in college and pursue my goal. But I don't know how to tackle my debt. I have credit card debt of $3,900. And my student loan that's going to become due is $4,000. But it's only going to become due if I don't put it back into, I forget what they call it, I'm so sorry, because I took off a semester. I'm back in now, though. So you got $4,000 of student loan debt, $4,000 of credit card debt, and then you've got this lease that you're paying $400 a month on um and then the rent's 798

right now that's correct that is correct i i'm going to be honest with you you have to be able to live and you have to be able to eat and you have to be able to pay for shelter and as important as school is those are going to be the priorities. Those four walls have to take precedent. So if you are calling me saying, hey, I've got a plan in order for this to work, but the only plan is for you to go to work. And then once you can get that stability. Your career so far has consisted of what? What have you done in your life a customer service bank no i i did not work hard enough uh when my daughter was younger because i was concentrating on basically working for aftercare child care um and now you're and now you're working for disability and pell grants

and that's what's bothering me in this discussion. Tommy, what do you mean? Well, it's because you're starving to death, all to get a business degree, and the business degree is not a silver bullet. It's not going to, you're not necessarily going to come out and make anything. No degree, no degree is a silver bullet, and you're really paying a serious price for that, and in the meantime, I don't know how you're going to pay for this car. That's a side issue. It's got to go. It's out of control. How in the meantime i don't know how you're gonna pay for this car that's a side issue it's got to go i know out of control how in the world that decision happened

but i know aside from that the that's a side that's a minor thing and compared to the fact that you've got two years of your life with no income but and everything is centered around not upsetting the disability apple cart where if you could go make 60 or 70 thousand dollars you just quit all this crap and forget it that's what i want but plenty of people do that without but plenty of people do that without a degree okay i wish i don't know which way to turn to do that yeah i have been trying i'm not i'm not accusing you of lack of effort. I'm just, what happens with these programs is if you're not careful, you end up submitting yourself to them rather than them being there to actually help. And that's what a lot of the language in this discussion is. And I'm trying to help get above that.

I think the best thing I can do is hook you up with the Ken Coleman curriculum. He's our career expert here. I'm going to give you his two books, Pay purpose and proximity principle and i want you to take his assessment and i want you to use that assessment to think about what i can do to go make money right now and kick all this uh assisted living or i'm sorry disability uh housing assistance and uh and education assistance to the curb because you're going to make some money. I think for your sake, if you can do that physically

and within the limitations of the disability, I think you're better off to abandon the government's help here because it sounds like it's holding you back. 100%. This is The Ramsey Show. Jade Walsh, our 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 budget. Every dollar makes it simple to plan your spending, track expenses, paycheck planning, work with your spouse, get out of debt, follow the baby steps. Yeah, that's what this budgeting app is all about.

It makes you do the stuff we're talking about. And it's free. Download every dollar for free in the App Store or Google Play or click the link in the description if you're on YouTube or podcast. Fabiola is with us in Atlanta. Hi, Fabiola. Welcome to The Ramsey Show. Hi.

Thank you so much for having me. Sure. What's up? Well, we are in a little bubble right now. My husband and I, we were pretty much debt free. We moved from South Florida to Georgia. Cost of living was a lot better here. My husband's been in the restaurant business for years and he decided that we wanted to open our own restaurant. And we did that. We took a leap of faith and unfortunately it went really bad. The company, the restaurant we opened, required a franchise fee,

and we pretty much put all our savings there towards the franchise fee and still had cushion just in case of an emergency. So we opened the restaurant. We were open for about one year, and it was just we weren't paying ourselves. We just had enough to pay employees and that was it. So we had to close and because we signed a 10 year lease, yeah, they wanted $65,000 from us to break the lease. So we had to file for bankruptcy because we could not do that.

We have three kids. So we had to file for bankruptcy because we could not do that. We have three kids, and we also had to get an SBA loan. And obviously, SBA loans are not forgiven. How much? That was a 65? No. The SBA loan that we still owe is $190,000, but we've spoken to them. They saw that we did file for bankruptcy, so as a hardship, they're willing to negotiate and go to $140,000. But we have to pay up front cash.

Yeah, so that's the question we have. We have our house, they have our house as collateral. Um, so the question is, um, we want to make the right decision. Like it, my husband's thinking of getting out our 401k and our children's... Sell your house. Okay, so that's our question. We have our kids' pre-paid colleges, and we would literally have to empty everything and start from zero. No. It doesn't make sense from a tax standpoint. It doesn't make sense from an emotional standpoint after everything you all have been through.

You lost your house with the restaurant deal right so sell it sell it and take the deal we have that big equity in our house we bought we purchased our house in 2019 for 275 and houses in two houses down in our street um one's on the market for 450450 right now, and one just closed up. Can you get the $140 out of your house when you sell it? So that's the thing. If we sell the house, it's no longer $140. They'll take what we owe, which is the $190 something. So yes, we would have equity to pay that off, but we just, you know, I guess we would still have our 401K. So your house is worth what?

Our house right now is probably worth $400,000. And you owe what, not counting the SBA loan? For our house, we owe $100,000 and roughly $189,000. Well, honey, you don't have any equity. Oh, with the SBA loan. They don't want to. How long will they wait for the $140,000? I don't know that they get a choice on where it comes from.

So the $140,000, so we have to make the decision. We have 10 days right now to make the decision. I know. It's just we found out on Friday I've been a mess. But so that's what I really wanted to get your advice. My uncle's very wise with money, and that was his first thing. He's like, you're going to think I'm crazy, but you need to sell your house where you get to keep your savings and your kids.

Your uncle's right. Your uncle's still right. Even if we can't get the 140 out, even if you have to keep your savings and your kids your uncle's right your uncle's still right even if we can't get the 140 out even if you have to take the 190 um your uncle's right you start fresh what's he doing for a living my my uncle he actually no your husband oh my husband um he works at a restaurant thankfully um you we cut our losses there, and he's a hustler, and he's working at a restaurant right now. How old are you two? We're both 35.

How long have you been married? Seven years. Are you working? I have three children. Yes, ma'am. I'm working full-time as a dental assistant, and I do part-time as a billing coordinator for my old office in South Florida. Okay, so let's walk through this for a second. Let's walk through this for a second. You have been through a hurricane. You've been through a

nightmare. You've been so scared you can't breathe. Right. He's lost some of his confidence or a lot of it. He no longer trusts himself. You question whether to trust him. You know how I know that's because it's exactly what Sharon and I were when we went broke. Right. And it'll affect your marriage. At some point, all of his loss of confidence and your terror will cause you to try to claw each other's eyes out yeah that hurdle already passed i mean if anything we're stronger and we're just i'm gonna

help you with this i'll help you with this probably the first wave passed i got a second wave three years later we ended up in the marriage counselor's office so but anyway i'm just telling you that that you guys have been through hell right and i'm hurting for you just listening to this story okay so what i want for you is a clean break and the bankruptcy didn't give you that correct because of the arcane asinine rules that the SBA uses. Okay. No one should, but if you're listening to me out there, you should never under any circumstances,

take out an SBA loan period. Okay. Because they always take a loan, lean on your home and you always lose it because 80% of the small businesses fail in the first five years of America. And the main reason is the debt that they take out with some stupid butt franchise. Oh, and let me help you with this. 90% of the restaurants fail.

Almost all of them. And you take out an SBA loan. So you people listening out there, listen to this call and don't do this. This couple's life is hell right now. Okay. So yeah, I want a clean break for you more than I want you to own this house. I want you to be a renter with a nice 401k and two nice jobs. And the sun has come out after the storm and there's a little bit of peace in the air for the first time in three years. Does that sound good? Yes.

That's what I want for you. I think it's just like, you know, things. I don't care. I don't care. It's hard. The whole thing's hard. The whole thing's hard. The whole thing's hard.

The whole thing's stupid. It's killer. It's awful. But put it in the rearview mirror, girl. Okay. Sell the house. Give them their money. Walk away.

You're done. Quick as you can. And we're still saving our car. You've got the rest of your life to learn. So now what did we learn? Franchises aren't magic. Never sign 10-year leases ever on anything when you're a brand new business. These are things I've learned already just listening to you. Oh, and stay away from the freaking SBA at all costs. These are things I've learned from talking to you. These are things I

already knew before talking to you. Okay. But you know, when Sharon and I went through the hell, one of the things we did, Fabiola, is we sat down and did an inventory. And we said, okay, how much of this was our fault? What was preventable so we never do it again? Because if you're going to go through this, you might as well come out of it with the lesson. And so I always tell people I got a PhD in DUMB. I signed up for some stupid butt stuff and I took all the trips. If you're going to take the trip, at least get the pictures, right?

At least learn the lesson. That's the thing, kiddo. I'm so sorry, honey. I'm so, I feel so bad for you. The great news is you're going to have a wonderful life 10 years from today because you'll never make these mistakes again. They burn holes in you. Jade Walsh, our Ramsey personality, is my co-host today.

Mika is with us in Boston. Hi, Mika. Welcome to the Ramsey Show. Hi, Dave. How are you doing? Better than I deserve. What's up? So I had just a question.

This is a pretty lighthearted one. It's a good question to be asking. I'm glad that I'm able to be in this position to ask. So basically, I have recently made a little bit of money in the stock market. I'm 20 years old, and something that I've been wanting. What's a little bit of money? $20,000. Okay. That is a little bit of money.

Okay. Yeah, I know. It's not me. Sometimes when people say that, they mean to million. I never know what they mean. Okay, so you made $20,000 and you're 20 years old. Very cool. Good for you. Yep.

And I have some other money in savings accounts. I probably have about $50,000 total, but I've been wanting to send my parents on vacation for a while because I think they can't really afford it themselves. And so I was just wondering if you think at my age, my parents, even like this is something that they would even want me to do, let alone if it makes sense financially for me to be able to. Why can't they go on vacation? What's the problem? They're not handling their money well? I think not exactly not handling their money well, but my dad owns a restaurant and he doesn't really make too much money. And my mom has been working herself out of debt for a while and is

doing a lot better now, but they're kind of just getting to the point where they're doing better for themselves. Do you have, what's your financial situation aside from you just made $20,000 in the stock market? So I'm in college right now. My college is paid for between scholarships, financial aid, and some money from my grandfather. So I don't have to worry about that. I work in the summers and have kind of a part-time job right now in college, but that's about it. Not too much incoming. Okay. What are we talking about spending on this vacation? So I want to spend more than they would probably be willing to spend on a vacation just because I want them to really enjoy themselves and not even have to really think about it. And so I was kind of thinking around $10,000.

Wow. You're a good son. Okay. So college is paid for. No car loan. No. Okay. No debt. no debt to speak of, and you've budgeted this out. How would you do it? Would you just give them the check? Would you do the flight? How do you plan on doing this? Basically, I think I would want to give them cash and just tell them or check and just say, this is exactly what this is for. And then talk to them about how they would want to do it. Because I want to kind of give them the leeway to really make it the trip they want.

They keep talking about eventually doing something like that. Do you think they'll take it? I don't know why, but I have a feeling they're going to look at that and hand it right back to you. There's a little bit of me that thinks that, but I think if I stand my ground, they would take it. Interesting. And I was also kind of curious your thoughts on the tax implications of doing that, because I would have to incur some capital gains tax if I were to sell.

Well, okay. Um, I gotta tell you, your, your generous heart is going to cause you to build wealth you're going to end up you're 20 years old you're going to end up being a millionaire by the time you're 30 okay and i don't know what you're screwing around with in the stock market but

you need to probably stop it um you're probably playing single stocks and day trading or some kind of crap i don't know how you made 20 grand that quick. You need to be real careful. You're like a guy that just hit on the slot machines, and now you think they work. So you've got to be careful with that. But you have a generous heart. You have a good head on your shoulders. You know your numbers.

You're mature. You're articulate at 20 years old. You're a fantastic young man. Anybody would be proud to call you son so well done sir um would i take 50 of what i have that is outside of my college that ensures me to complete college and spend it on a one-time trip for my parents no i would not no i would not that's a little overly generous um and it's not the end of the world but you're asking what we would do what i would do if i was going to do this i might do as much as 5k

but that would be the most i would do and then let them go somewhere on 5k um or don't do it at all that's okay too um the alternative is um that you send them on a uh i was on a cruise this summer that we were on for two weeks and there were several couples that had been on there for four months and uh they were multi-millionaires and they were just sailing around the world kind of thing they had started in antarctica and they went all the way to the Arctic from one end of the globe to the other, and it was a pretty cool cruise that way. I just did part of it up to Iceland. But, you know, you meet these people, and, you know, you could send them on something like that when you're 30 and a millionaire.

That would be different than $10,000. By the way, the ticket on that's a lot more than $10,000. But the point being that you could not do this now and do a bigger one later. You could do five now. You can do 10 now. You have the right to do that. It's your money. I'm not stealing your rights from you, but you ask for an opinion and I'll give you an opinion. What do you think, Jade? I don't think they're going to take it. I just don't think they are. And I agree with Dave. It's your money. I just relate to this.

When you said this, I relate to it. That's something that I would have done when I was your age if I could have done it. So I get it. If you had called, I think I would have felt better about it if you had called and said, I landed this great job. And here's my income. And here's what I'm able to save. And if I felt like this was

something that was going to keep happening, I would feel a lot better about it. But because this was kind of a windfall, yeah, just a one-off thing. I think that there's probably something you could do with this money that's going to serve you better and thereby serve your parents better long-term. But that's just me. Yeah, I think I'm in the camp of waiting till you're wealthy and then doing something. And it's really not going to be that long because you're a sharp young dude. You're going to be there. You're going to finish this degree. You're going to come out making bank.

You're going to always pay attention to your money. So you're going to have some. And you're going to be generous. So you're going to have some. And I think you're going to be there. But I, you know, well, you asked, so I'll give you an opinion. It's not bad if you do it. It's not the end of the world if you do it.

But I'm like you, Jade. I think the couple that raises this young man doesn't take this check. No, they can't take it. They don't raise this guy and then take that check. No, I agree. I don't see it happening. They're going to be so proud of you when you offer it but they're not gonna they're not gonna take yeah i agree and i think you've cooked this up in your mind that there's a different scenario but

it could i don't know i mean we've been wrong about a lot of stuff it's not going to kill you either way if you it's not going to ruin your life it's not going to bankrupt you it's just a discussion about philosophy one of the things i don't like to do is put 50 of everything i have on something that always feels out of control for me whether it's a giving item whether it's an investing item whatever a spending item whatever it is i don't want to put 50 of what i got on one thing. That bothers me. So anyway, that's something to think about. Open phones at 888-825-5225.

And you know, Jade, I was with a group of friends the other day that are old wealthy jerks, not jerks, they're just all wealthy guys and um they're always playing golf with some guys and they're always asking me you know you're you're all you're on the show and you know you've got like 500 of these gen uh s's gen z's whatever they are working over there you know i they all a lot of the boomers think that generation's useless and i'm running around constantly being the defender of this generation because I run into guys like him. And 22-year-olds, 26-year-olds, I've got a bunch of them in this building,

and they're absolutely incredible. And, of course, you know, the fastest way to assume a stereotype about any group of people is to not know any of them it's where sexism comes from it's where racism comes from is ignorance it's where uh people that think everybody in one region is one way or something that's ignorance i'm always tickled the people in new york think we broadcast from a double wide with no shoes because we're in Nashville like they watch the Beverly Hillbillies in 1967 and they still think that's it I mean it's it's hilarious you ought to get out more people you ought to leave Manhattan occasionally you know I mean but if you meet people that are awesome in any group

of people it does away with all those ridiculous ignorant stereotypes that's right and that kid right there is one of those great neat kid this is the ramsey show our scripture of the day proverbs 11 14 where there is no guidance a nation falls but in an abundance of counselors there is safety george bernard shaw said if all the economists were laid end to end they'd never reach a conclusion that's great oh aaron aaron is with us in phoenix hi aaron how are you uh doing well, sir. How about yourself? Better than I deserve. What's up? Hi.

Well, first of all, thank you so much for your time. I greatly appreciate it. You know, I had a question. I'm coming into kind of a big time in my life. My fiancé and I are building our first home together. So we're very excited about that. But obviously, you know, that's a big expense. And, you know, after talking to some friends and family, one thing that we were kind of warned against was, hey, you know, it's great and dandy and all, but make sure that you don't become

house poor. You've already made all the decisions. Right, right. Well, what I wanted to ask was, you know, based on kind of where we're at right now, the assets and the debts that we have currently, income as well, you know, what would you recommend to avoid that at all? And what are some advice moving forward to make sure that we can avoid that in the long term and, you know, continue generating wealth despite having this. What's your house payment going to be? It is going to be, well, we're not locked in yet, so I'm not sure exactly what the payment's going to be. I think it's going to be around $4,000, though.

What's your monthly take-home going to be when you're married? It's going to be about $305,000. So about $25,000 a month take-home. Yes, sir. That's take-home pay? Oh, no, sir. That's gross. Take-home, that would be about...

It's going to be about $16,000 or $17,000. Correct. Correct. Yeah. And what do you do? I'm a lawyer. What does she do? She is in real estate development. When are you getting married?

We are thinking late next year, early 2026. When's the house completed? It is going to be complete in March of 2025. You should be married before then. You have a nightmare legally and relationally when you own a house with somebody you're not married to. You should know that as a lawyer. Understood.

You have a general partnership with no partnership documents, dude. Understood. Yeah. Let me tell you what we talk to around here. We talk to people whose fiance got in a car wreck, and now he owns a house with her mother because she didn't have a will, and they were both on the deed, and he's not the heir because he's not married.

That's who we talk to around here. We see all these things, best laid plans of mice and men go asunder. Please do not buy a home with someone you're not married to, folk. Now, so you can do whatever you want to do, but you called and asked something else. Now, we tell folks to not have a house payment more than a fourth of their take-home pay on a 15-year fixed rate your house payment's not more than a fourth of your take-home pay i don't know if it's on a 15-year it's probably not you're probably on a 30 uh but you're not house poor on that basis uh we also tell people to be debt-free. Do you still have law school debt? No, sir. Good.

Do you have any debt? My fiance has about $45,000 in student loan debt. Other than that, we have no debt. Okay. Do you have that much money in the bank? About $70,000 in cash and about a hundred thousand in stock. It's not romantic, but it increases the probability of a good life 10 years from now. So I'm going to go ahead and tell you the answer. And I don't know how you work through the romance. You got to figure that out. But if I woke up in your shoes from a legal and relational standpoint, I would be married before we bought

before we closed on the permanent mortgage on this house and i would pay off all of her debt i'd be debt free when i move in and we'll kind of combine our finances and combine everything legally and combine everything and if you want to have a big celebration in the fall fine but i would be legally married by march if i woke up in your shoes because i've seen all the downsides of the other things that can happen and i think it'll support and you pay off her debts with your cash at that point don't do it until you're married but it's the day you're married you come home from the honeymoon do that and then y'all have a big celebration or something in the fall a lot of people are doing that in this shack up live together world they they get married and then a year later they have a big thing and i don't know

how that stuff works i'm from a different world i was here when the dinosaurs roamed the earth but the uh uh but that that that's what i would do aaron and that that and the answer to your question is if you can put it on a 15 year fixed you're permanent which you still can because you haven't locked it in, even if it stretches you a little, I would go ahead and do that. To what extent? I mean, I think it's going to be $5,000 a month instead of $4,000. And I think they're young lawyers and they're making big money, so they're going to be fine.

And he's sitting on cash, so he's got plenty of margin. It pushes my $25,000. But the answer, you know, what is house poor? House poor is buying a house with no money in the bank, with a big pile of debt, and a house payment that's more than 25% of your take-home pay on a 15-year fix. That's how we define it. If you meet those three guidelines, you will have margin to build wealth and margin to stay out of debt on the next car purchase

and the next vacation and the next Christmas. But if you don't, all those things are going to bite you in the butt later yeah they will yeah i the idea of marrying somebody a year what do you say about a year later a year and a half later that is scary because when you're not married the first argument comes something blows up that person can just walk away because you're not married but if you're married you work things out well they can but these guys they're committed it sounds like i don't i'm not that worried about that but it does change the dynamic and i gotta tell you that it's over it's the it's water under the bridge but building a house with someone

i mean sharon and i have had some of the biggest fights in our life that's what i'm talking about and and we've been married a while and have a good marriage i mean you want to put a an engagement to the test that's what i'm saying pick out faucets i mean that'll do it you know golly you're brave man aaron but y'all pulled it off it sounds like he didn't have any stress in his voice he didn't sound like it no that's good i'm happy for him i'm happy it's working uh but you know if you were to call before before all this happened i would have told you not to build a house with somebody you're not married absolutely now i think that love is blind and i think he was smart thinking through the numbers but he forgot to be smart when it came to the locking down the old lady yeah so we always tell folks in general, and Aaron, this is way

past you now. We got you covered. You did a good job. You're making a lot of money. You're a smart guy. You're going to be okay. But those are our suggestions in your situation. And you'll pick and choose off the buffet, which of them you want to use, or if you want to use all of them, you'll be a smart guy. But, um, but that's, you know, there's an old thing we tell folks when they're young couples, when they first get married, don't even buy a house first year. Yeah, there's too much going on. The first year of marriage is a deal. It's interesting.

And I mean, there's actually a time in the Old Testament that they wouldn't let a young man that just got married go to war in the first year. They had to stay home and take care of their house for the first year. Interesting. All right. Before they could go out and go to war. Mm-hmm. And so, you you know we kind of thought okay and my my joke is always it takes a year to know how close to your mother-in-law to buy and so um but yeah you got to check that out but the you know you got it you know each other different a year after marriage than any amount

of dating or engagement up to that point yeah Yeah, I think so. And you make a better house choice, you'll pick different wallpaper. That's right. That's right. And depending on when you get married, if you get married right out of school, like your income has the ability to change, you have the ability. They're making great money, yeah. Yeah, there's a lot of change that is taking place. You don't need to add to it.

Yeah, I mean, you can get a divorce over hanging curtains. It's just can happen so i mean it's hard y'all so all of that's interesting and it's just thoughts so but obviously he's already made a whole bunch of those decisions up front and she has too so you just got to work those through and um but you are getting the young man is getting good advice the young lawyer there to not be house poor i like that that's good advice all right that puts this hour of the ramsey show in the books we'll be back with you before you know what 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 with the Prince of Peace, Christ Jesus. Thank you.