The Ramsey Show - App - Debt Is Never a Blessing, It's Always a Burden

Episode Date: September 6, 2024

From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by one of my best buds, Dr. John Deloney, host of The Dr. John Deloney Show, and we're taking your calls at 888-825-5225. You call up, we'll talk about your life, your money, your relationships, your mental health issues, boundary issues, whatever you want. We're going to air it out in front of everyone for the good of America. Is that aggressive enough, John? Is that a big enough promise? It's quite the lofty promise. That's right. We'll see if we can accomplish it today. Mason kicks us off in Springfield, Missouri.

What is going on, Mason? Hi, guys. Thanks for taking my call. I'm actually calling on behalf of my sister-in-law. she had a stroke three years ago at the age of 23 and has since been trying to get back into the job market, and she just simply can't get herself back to normal and has not changed her spending habits from when she was working two jobs 80 hours a week. She was a hard worker, and now she's stuck and she's taking on loans, and she doesn't know whether she needs to file bankruptcy or if there's another route that she can go. There's always another route. The question is, how is she,

let's separate the two from financial problems to her health, how is she doing health-wise? She can't speak well. She pretty much mixes her sentences with ums and uhs nonstop and has to have assistance with reminding her of different words. And then her physicals about the right side of her body, a portion of it does not work. She can't move her arm well. She can walk, but she is frequently stumbling at times and happens to pull herself up or get assistance to get up. And that's about the extent of it, her health. She's still going through therapy, but it's based on what the doctor has said. He does not have any expectations that she'll recover past that point. What is she doing for work right now?

She's not. She's applied multiple places, and every time she goes to do the interview, it pretty much gets shut down during the interview. I would check out. I don't know the resources there in Springfield, but I would check out and call around and see.

Sometimes there are entry-level programs, maybe through a disability rights program or some sort of state-run program or local program there in Springfield, which here's what we're looking for. We're looking for an on-ramp so that she can, A, get her confidence back, B, figure out the actual limitations in a work setting because those are different than at home sometimes and then from there you can springboard to another job that might pay more that might be in a more established place so that's number one filing bankruptcy while somebody is still spending out of control is like congress forgiving student loans and making them in the same month right like it's not a solution the solution number one is like let's stop let's stop the bleeding why won't she stop spending or where is she getting money to spend let me ask that so uh so her spending habits come from when she was working constantly. She had enough to pay for her, her, her lifestyle, uh, and then was able to save a lot of money. And she had a

boyfriend, her and her boyfriend would just essentially just buy whatever they, they wanted to. Uh, and when she had the stroke, she lost both her jobs and, uh and then now she's on disability, but she hasn't really, she has reduced a lot of her spending, but it's still at a specific lifestyle that she enjoyed before her stroke. And I think that's the biggest portion of it. And then the money, so it would be her boyfriend who works, and then her disability that she gets. Have you talked to her uh yes how'd that go uh are you referring to talk to her about the spending habits yes yeah because here's the the hardest part of all this at the end of the day she's an adult yes and unless you have financial power of attorney you got no say in her finances she didn't have to do anything

she don't want to do. And that's hard and it's miserable and it's heartbreaking and all those things, but it just is. Yeah, that's a conversation that we had just after her stroke about my wife and I sought to try to assist with managing her finances. We got some pushback from a lot of the family, but they've come to us with assistance and a lot of different things. And then when it came to spending less, I would refer to the government example that you gave. It just was not interested in cutting costs

and reducing spending as much as it was. How can I help get out of this hole? How can I get out of this hole? So it may be that the solution out of this situation for you is to, you and your wife, draw some pretty firm boundaries inside your home and knowing that this ship will run aground at some point. Yeah, and I think the biggest reason is there's some issues with her and her boyfriend. And now she's needing to leave him, but she can't really go anywhere because she's tied to an rv that they live in that is under her name and she can't afford on her own yeah and she could

sell it she can trade some other things but she's made some choices and refused help from other adults um if you and your wife choose the only way i've seen it be successful is if somebody steps in and says i need some help and you're able to say, okay, here is my conditions for help. And I'm not going to enable. Here's what help would look like if you want to participate. And you and your wife make that decision beforehand. It's very hard to do in the moment because it sometimes includes you're not there for me. You hate me.

I knew I couldn't, like all that kind of stuff that just is real personal and attacks. And it's hard to hold boundaries in the moment if you haven't thought through them clearly on the other side. I mean, on the front end, right? Yes. Yeah, that's the best case scenario. She doesn't have to do anything you say. She hasn't for a long time.

And until she says, hey, I need some help and I'm willing to accept the help that you'll provide, I think what you can do is let her know that you love her and that you'll be there when she decides to call. I don't know another option. You know what I mean? If you give her a book, it's just going to sit on the shelf. And maybe one day she'll pick it up. But we can't force her to go, you're going to learn this, and you're going to do something about it.

Yes, and this is actually a lesson we've already learned in this process. I think it was a more of a way. And even if we came to her with this advice, which is an advice that we've given before, it has been more of a, that's a really good idea. And that was pretty much the extent of the response from her. How much is that his boyfriend? Say that again. I'm sorry.

How much, how much is the lack of, of action on the back end is, is boyfriend? Would you say, you mean how much does he provide? No, like you guys sit down with her and say, hey, here's reality. Here's the amount of money that you're spending. We want to help you. And she's like, that sounds amazing. And then she tells him, he's like, that's stupid.

Yeah, he's not really involved in the conversation because she's trying to get away from him due to certain circumstances that are nothing violent or anything uh it may have you know i think it goes back to the the thing that you guys mentioned about not putting yourself in financial situation that requires the income of uh people that you you don't have a a you may not have a long-term uh established relationship such as marriage. There's no marriage between them. Well, aside from her health issues, she's made a lot of choices,

and it's going to be hard to unwind all of this unless she really wants to, on top of fixing the health issues. So I hope she does, and I hope you can help her with some resources. But like John said, I wish I could just wave a wand and change people because I love them. Adults can't change other adults. It's heartbreaking. That's one of the hardest truths to learn in life. But thanks for the call, Mason. You're a great brother, and I wish you and her well on the financial journey. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get ten different answers.

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This is the Ramsey Show. I'm George Campbell, joined by Dr. John Bologna. We're taking your calls at 888-825-5225. Danielle joins us up next in Milwaukee. Danielle, welcome to The Ramsey Show. Hi, thanks for having me. Absolutely. How can John and I help? Well, I'm calling about a question regarding paying for my father's phone bill. Basically, my dad lives below the poverty line due to his own life choices. I've helped him financially throughout the years. And currently, I am just paying his phone bill.

And I want to help him. And this has been a way that I've been able to do so. But he has been making some questionable choices and I don't want to parent him. And I just I'm not sure if this is the right thing for me to be doing. Yeah, I'm happy to give more color to that. It's, you know, family, it's kind of complicated. Yeah, it always feels so complicated when you're in it. And in Georgia, in my seat, it's usually way less complicated.

Can I ask you a hard question? Yes. Are you paying his phone bill for him or for you? For him. I know, but are you paying the bill for him or for you? Well, I guess I want him to be okay, so I guess for me in that regard. Has he listened to any of the wisdom or advice you've given him over the years? Um, no, not really.

If behavior is a language, what has he been telling you for a long, long time? Well, I guess that he doesn't value my input yeah he'll take your money he'll take your phone bill cool but when it comes to I want to live a different life a healthier life a safer life a more loving life yeah I don't really

care about that I'm especially not going to take that crap from you and then with the healthiness of who do you think you are I'm your dad how long have you been chasing him your whole life no um I would say when my parents my parents were married for 35 years and once they divorced I, I kind of, not right away, but, you know, as he just continued to make bad choices, I sort of, unbeknownst to me, took the role of my mom. Yeah, there you go. Yeah, I know. That's a weird position to be in.

And while you chose to be there, he had a part in putting you there. And you have a choice also to get out of this and to say, hey, Dad, listen, I can't cover your phone bill anymore. What would happen if that were the case? What would the conversation be like? At this point, it's going to be me probably writing him a letter. I've tried to. This is the second time I knew I wanted to go out and visit him.

He lives out of state. And I don't know if he just doesn't want me to visit him or what, but he always has a way of just, you know, bringing, we don't always agree on, you know, kind of everything. Right. everything, right? And I'm fine to just leave those things out of the conversation, but he has a way of bringing them up and just... Would you call this relationship transactional at this point? No, it's not.

I mean, he was a really good dad to me growing up and he's not a bad person. He just makes really bad choices and doesn't seem to learn from them. So that's why it's, you know, he's not a bad person. He just makes really bad choices and doesn't seem to learn from them. So that's why he's not a bad guy. Well, it's not about his character, but I'm saying the relationship right now is, I pay the bill, he doesn't really want to see me, he doesn't want much to do with me, but please keep paying my phone bill, and thank you.

It's more nuanced than that, but I mean, yeah, I realize I'm calling you guys asking you for advice. I mean, is it more nuanced than that, but I mean, yeah, I realize I'm calling you guys asking you for, I mean, is it more nuanced than that? Yeah, I really, I really think it is. I mean, he, you know, expressed that he was excited to see me, but then he's telling me, you know, he's, I don't want to get into, I don't want to take too much of your time, but you know, he's, he went through, he's not even technically divorced, um, the third time, but he is separated, I guess, legally. Um, and he's started these, like some kind of dating site. I don't know what

he's doing. And there's been people he's been talking to, and I thought all of that was behind him now, but he just shared with me that he's been talking to 30-year-old women on some weird encrypted app. I just don't understand. And now I feel like he's putting my own safety with my phone account linked to his in jeopardy. And I'm just like, yeah. Your gut instinct is right

and there's more to it than this too yeah yeah I think if to circle back to the first question I asked you is are you paying this phone bill so that you can sleep at night knowing I tried to preserve my relationship with my dad. As I watched him slowly, the man that I love, the good dad that I had, as I watched him slowly implode his life. Getting involved with all these people, getting married a bunch of times, now he's just he's slowly just unwinding often we try to hang on because something inside of us says that if there's just we say the right thing or we can just give the right amount of data or just just do the right nice kind thing that suddenly they'll be like oh amazing hey by the way can you help me with my love life and my money and right and unfortunately this call is not going

to come and so if you want to make if you want to pay his phone bill and just pay his phone bill and make that a part of your life and and not hope for that that will have an ro a relational roi on it great knock your lights out george and i let's just say make sure you're not putting on a credit card right um if you're just tired of being involved with all this and now you're wondering what he's even doing on an encrypted app that's linked to you and your bank account, dude, I'm going to write him a letter and say, hey, I'm going to step away from this. Yeah. And then you're going to have to spend some time in this scary black hole called grief.

It's not supposed to be like this. Your parents were married for 34 years. Yeah. Here's the spark notes. If a cell phone bill is propping up the relationship and this is one Jenga piece that knocks the whole thing down, there was never a relationship there.

And that's the hardest, scariest part to face. Is that whatever was, I know he's a good guy, he was a great but it's changed the relationship's changed and i think that's the hardest part to grieve is the guy he was and the guy he is now and i know you know this but i feel i feel compelled to say it you didn't do anything wrong daniel you've been a good daughter there's not a thing we tried i know but there's not a thing you could have done differently in you've been a good daughter. There's not a thing. I've certainly tried.

I know, but there's not a thing you could have done differently in a conversation you didn't have. He's your dad. He's a grown man. He's way older than you. He's made adult choices. And like we told the previous call, there's just nothing harder

than watching someone you love flush their life away. Especially when you're standing there on the bank of the river saying, I can help, I can help. And they're like, nah, just stay here. It's heartbreaking. What is his portion of the cell phone bill? I'm just curious.

What's the financial amount? Maybe like 70 bucks or something like that. So if it was on him to cover 70 bucks from now on, do you think he could do it? No, I think he'd have to go back to like a flip phone. Maybe that's the best thing he could do. That sounds like a great idea for him. Honestly, ever since he got this iPhone and he's had more time on his hands, I just don't even understand what's going on over there.

Yeah, it might keep them out of jail. I think it's a good idea. Seriously. Yeah. Something's weird. Yeah. I'm so sorry, Daniel. That is not a fun thing to deal with.

The theme so far of the show, John, has been you cannot change people. No. No matter what you want to give them or cover for them, it's not going to make the relationship better, and it's not going to solve their problems. You can create good boundaries. You can be graceful and merciful and forgiving, and then you can do the next right thing for you and for your relationship,

and sometimes that's walking away. Sometimes that's just saying, I'm taking my hands off the wheel. You're driving. Cool. I'll be here when you're ready. More of your calls coming up, 888-825-5225. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by bestselling author Dr. John Maloney. Open phones at 888-825-5225.

Let's keep it rocking with Danny in Columbus, Ohio. Danny, welcome to the show. We are rocking, Danny. Hey, guys. Yeah. How's it going? Good. We are rocking, Danny. Hey, guys. Yeah. How's it going? Good. How are you? Not too bad. Appreciate you guys taking the time. I had a question. I recently got promoted a couple months ago, and I've got some extra money coming in and was just curious to hear your thoughts on how I should split that up and incorporate that into my budget.

Fantastic. Congrats. Tell us about the promotion. How much more are you making? So I went from, so there's a 10% bonus attached to the base salary. So I went from about 78 grand to 89. And then with that bonus, it's about 85,000 to 98,000. Incredible. Okay. So let's talk about how much is actually coming in to your budget

every month on top of what you were making. So what's the increase in your take-home pay? I don't have, so currently gross pay last paycheck was about 3,600. I get paid bimonthly. I don't know. I don't have exactly what it was prior to that, but it's like around $5,000 coming in each month, I think $2,400 after pre-tax deductions and 401K and all that. And what's your financial picture? Do you have any debt? Do you have an emergency fund? Yeah, so that was kind of part of the question too.

So right now I've got, you know, I max out my Roth contributions every year, max out my HSA company matches, a hundred percent, uh, up to the first 6% of my 401k. So all of that's being contributed. Um, and then I've got about eight grand cash in savings and the only debt I have. So I had 20 around 23,000 student loans, uh, paid that off during COVID and I've $4,900 left on that. Wait, you have $8,000 in savings and $4,900 left in student loans?

Yeah, yeah. You know what this means, Danny. Yeah, I know. I've got to pay that off. Why aren't you doing that today? Well, I kind of wanted to call. I mean, I kind of figured to call i mean i'm i've kind of figured y'all would say that i guess the the situation i'm in now so i know i know how you know dave and you all feel about car leases but um you know i've got a i've got a lease and um i think you know following the

baby steps that kind of puts me in a weird spot where you know i've got some emergency cash saved up but i also still have this car lease. And I know paying that off early doesn't really help you. So I guess, you know, with that taken into consideration, you know, if I do pay off that $4,900, you know, once we hang up kind of how to move forward from there. Well, if you want to keep the car, what is this car worth if you did the early buyout on it? So I'm on a portal right now. If I requested a buyout right now, it would be $38,000. Okay.

Now, that's your only vehicle, only thing with wheels and motors in it? Yeah, that's it. Do you love this car? Do you want to keep it? I mean, if it makes financial sense to keep it by the time that the lease cycle is over, I'd definitely hold on to it. I didn't really get into a car lease to get a new car every year. Right now, it just kind of made the most sense.

Are you renting? Apartment? Yeah. Yeah, yeah, renting. You keep saying that it made the most sense. How? How does paying a car dealership money for their depreciating assets so that they can fund the gap between the car that's going to lose money, how does that make sense?

Yeah, I mean, that's a fair question. I kind of put off getting a car for two and a half years and saved up some cash, used that money to pay off the student loans instead of buying a car. Were you driving during all that time? I was just walking and taking a train. Yeah. Yeah. Danny, here's my thing.

I have lofty financial goals where I'm like, I want to own a house one day. I'm going to get married. I want to save up for a vacation. And so cars are a depreciating asset, and leases just allow you to prepay all the depreciation is essentially what happens. And so it's not that the car is too much of your world. We say, Hey, no more than half of your annual income tied up in all the things with

wheels and motors. So you're not above that right now. You're not, you know, breaking that parameter, but it's a lot of car for a guy who has some debt, doesn't have a fully funded emergency fund, probably wants to own a home one day. And so it's not, you can for a guy who has some debt, doesn't have a fully funded emergency fund, probably wants to own a home one day. And so it's not, you can keep the car if you want to aggressively pay it off. You can pay this thing off in a year or two, go ahead and keep it if you love it. But I would also reassess what your future looks like.

Not what tomorrow Danny looks like, not what a year from now, what is five year Danny? Look, what would he look back on and go, that was the right move? Yeah, so I guess kind of with that, you know, I'm 20, 25 right now. With that taken into consideration, you know, as far as addressing the car situation, would you request that buyout and just take a loan and try and just pay that thing off as soon as possible? I mean, is there a way of getting out of that lease? You know, just kind of ride it until the end of the cycle and, you know, kind of go from there and likely not lease another car, but buy something that, you know, buy it in cash.

Yeah, I mean, you could save up the cash and do it. But again, that's a big mountain to climb right there, isn't it? Yeah, yeah, for sure. Because so far you've saved up $8,000. To save up $38,000, you're like, oh my gosh, is this car worth it? Yeah, yeah. filter it through the baby steps. And right now you're in baby step two, which means we're pausing all investing. We're actually going to take all savings, but a thousand bucks, throwing it at the debt. And what that will do is catapult you in your financial journey. And within a year, if you get rid of this car, you do all the things I mentioned, you'll be in such a different financial place and you'll be making very different decisions with all this new money. What you don't want to do

is allow lifestyle creep to set in where Danny goes, hey, I made an extra 10 grand this year. I'm going to spend an extra 11 grand. That's most Americans. Yeah. So I hope that helps. I would contact the dealer and get the early buyout amount, see what your options are. But I don't know that I'd want to take out a $38,000 loan right now. That's not going to further your financial goals. All right, John, let's go to the Ramsey Network question app. How do you feel about that? You feel good? Yeah.

John's hung up. Well, so my high school kid, and of course on day one. He's in high school? Yeah, he's in high school now. Oh, my gosh. This gets worse um he walks into his econ class and the curriculum is you and me george you and me oh that's right and uh on the ramsey education um high school curriculum and his teacher he said his teacher

raised an eyebrow looked at him and said are you and he goes yes and he said only one of the students caught on so far um he did have some choice things to say about our acting i don't think we're that great i thought it was pretty good i thought we crushed it i mean it was a little bit grammy i mean not grammy but it was it was emmy worthy here's my thing are we gonna trust awkward teenagers to judge our acting fair well played well just saying uh but he was asking me about car leases. He's like, I don't understand them. And as my 14 year old laid it out, it makes so no sense. It's so irrational to do a car lease that my 14 year old can't wrap his head

around why people would do that. Like, well, it's simple. I get the shiny thing forever, even though if I don't own it, but in his head, why would you give he's like

hey this new car is going to go down in value so if it goes down in value over two years and you lease it you're just paying the dealership for two years so that they get to keep all that money and then you have to eat the depreciation then they get the car back and i was like yep he's like why would somebody do that and i was like i don't know man and so i just get stuck on no i had to man it was the right thing it's just not it's just not well people go well john i don't have to deal with the maintenance and it's awesome and i get just keep getting new fancy cars and i love the new car smell all the while realizing that this is one of the biggest things holding people back

it's car payments and leases and there's a reason the dealerships love to push you to a lease they love them because they get a red flag they get a gently used car that they control the mileage on back that's been um majority depreciated and then they resell it to somebody else and they win twice it's uh it's a sad conundrum and i i write write about this in my book breaking free Free from Broke, John, to try to steer people away from it. And I walk through all of the reasons it is in existence to screw you. And it moves you backwards financially. And the best thing you can do is just save up and buy a cash car you can afford versus listening to the human brain that says, ooh, shiny. That's right.

That's it. You're the honeycomb. We come back. We'll go to the Ramsey Network app question. But sorry, my 14-year-old can do better math than some folks out there. Way to humble brag. Hank's an impressive cat. Hashtag just saying. I'll tell you that much. All right. Hashtag just saying. More of the Ramsey Show coming up. Don't go anywhere. There's a time in your life and at the baby steps for renting, but you don't want to do it forever

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baby steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSConsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. RentWidth Tennessee 37027. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Maloney. You've heard me talking about every dollar on this show, and that is the best way to make the most of your money. It is a sweet budgeting app you can download right there in the App Store or Google Play. And it makes it really simple to plan your spending, track expenses, save for what matters to you,

all in an easy-to-use app that fits into your busy life because it's always with you in the palm of your hand. So if you want to check it out, go to the App Store or Google Play and just search EveryDollar or click the link in the description if you're listening on YouTube or podcast. All right, John, it's time for our question of the day brought to you by YRefi. YRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed interest rate you couldn't get anywhere else to help you stick to your budget and work that debt snowball, go to YRefi.com today slash Ramsey. That's letter Y, R-E-F-Y.com slash Ramsey. Might not be available in all states. All right, today's question comes from Alyssa in Pennsylvania. Alyssa writes,

I was completely debt-free but recently had some life situations that put me back in debt. Can we stop real quick here? I want to rephrase this in a more accurate and honest way, okay? Today's question comes from Alyssa in Pennsylvania. I was completely debt-free, but life happened, and I chose to make some purchases on credit cards. See what I'm saying? That's more honest because life situations, they have no ability to put you in.

That's right, that's right. But I made life situations, they have no ability to put you in. That's right. That's right. But I made some choices. How you respond. There you go. There we go. I opened a store credit card for home remodeling purchases and charged $7,000 over several months.

Each time I made a purchase, they would give the option of interest free, which I always opted to do. In the past five months, I paid over $5,000 on the credit card, bringing my balance to $2,000. the credit card, bringing my balance to $2,000. So proud of myself. Today, my balance had gone back up to $5,000 and I freaked out because I knew I'd been hacked. Come to find out, they'd added a $3,000 penalty for not paying the entire balance by a certain date. I had no clue about this.

I told them I wasn't going to pay a red cent and asked them to close my account. I've always paid my bills and have good credit, but it should be illegal to charge a single mom who only makes $25 an hour this exorbitant fee. What is your advice on the matter? Okay, so I never ever will have empathy for a credit card company, but I'm on the credit card company side. They do not care how much you make per hour. They do not care if you're a single mom. And no, it's not illegal. You probably just didn't read the fine print.

You signed away in a hurry because you were excited to remodel your home. And they lured you in with free. Just click. Make sure you click the button that says interest free. And you're like, sweet. And they were like, don't read over here where. Where it says if you don't pay the balance in full, there's this massive penalty. Oh, and by the way, there's 25% interest interest which is like a fourth of the entire debt that's

going to get added to it and so what is my advice on this matter should it be illegal to charge i don't think it's a you know we live in an economy in a capitalistic society you can pretty much do what you want you can you're an adult you get to make decisions that can derail your financial life if you want. That's part of American freedoms. And you also have to own up and look in the mirror and go, yeah, that was pretty dumb of me to trust a credit card company

to be a blessing in my life. Yeah, and at the end of the day, here's the hard thing. You owe that money. And so choosing to not pay quote unquote a red cent and asking them to close your account um it doesn't work it's gonna add up and it's gonna add up they'll just sue you if you don't pay right which is only going to add more financial yeah so this three thousand is gonna turn into ten thousand it's just um and by the way these store credit cards

are some of the highest interest rates yeah i remember one time dave called i think it was sears back in the day when that place is open that they are just credit cards with stuff out front and i like that like like store credit cards the stuff is just the vehicle like they're really in the credit card lending the lending business there's the lending and they have stuff they got pants out front that's right yeah and screwdrivers and whatever else they got so um yeah i hate this for you alissa but you got to pay you got to pay i i think man if i could give you one piece of advice it's to be bummed out and take full 100 ownership of what you put your name on and you you don't have three thousand dollars i don't know anybody that just has a spare three

grand laying around. We've got to figure out how to get this stuff paid off, and then we have to commit to not, quote-unquote, letting life situations put you back in debt. That might mean we're going to do without a sink for a while. That might mean that it's going to be hot or it's going to be cold because we can't afford X, Y, and Z. That just may be the reality of what you can or can't afford. And that sounds harsh, but this is what happens.

This is what happens. And I remember when Hurricane Alicia came through Houston when I was a really young kid and that we had no power for a week and we ate off a camp stove. I just remember that. I tell you that to say, whatever you're going through, you'll look back on it in five years, 10 years, 15, 20 years, you'll remember those things. Remember that time we had to do without?

Yeah, that was weird and that stunk or whatever. But it keeps this kind of crap from happening. Yeah. And so the better way to do this next time is to give yourself a 0% loan you never have to pay back because it's coming out of your own bank account from money you saved up for through a sinking fund, through an emergency fund if it's a true emergency. That is the way to do it where you never have to deal with any of this crap ever again and you have freedom and options.

So thank you for the question, Alyssa. I hate this for you, Alyssa. Yeah, we're not pumped about this. And trust me, I'm no fan of credit card companies. All right, Jacob is next up in Jonesboro. What's going on? Oh, how are you guys doing today? Oh, I just, I'm 20 years old.

I'm active duty military, and I have no debt, so I'm just trying to figure out what exactly to do to better my future. Love it. Thanks for your service, and congrats on living a debt-free life. Thank you, thank you. How much money do you have in the bank? Right now I have $4,000 saved up. Awesome.

And what does life look like for you in the next year or two? Do you have a contract, deployment, or what's the next goal? I have two years left on my contract with the deployment in that two years. Okay. Are you single? I am single. Awesome. So let's say two years goes by.

Can you keep saving money? How much money could you save up in that account in the next two years? I make roughly two grand a month. So, I mean, it's kind of hard to say because I do have like, I guess I have car insurance and stuff like that. But I definitely could probably save a thousand a month pretty easy. Okay, so think about that. We're talking another 24 grand added to your four. So two years from now, you have 28 grand sitting in account.

That's your emergency fund plus some extra. Maybe we separate them out and start a down payment fund. Because one day you're probably going to want to buy a house, right? Yes. That's great. And I would park it in a high yield savings account. And one I love and use is called Laurel Road. If you want to check them out, laurelroad.com slash George.

And that'll at least help it grow at like 5% over the next two years while you keep being diligent and serving this country okay so you are on the path as far as setting yourself for the future beyond your emergency fund i would begin investing i imagine you have access to a tsp through the military retirement account yes i am putting as of right now 20 and then they match 10%. Wow. So we're talking 30%. Yes. And 10% of that is a 100% return on your money. Yes. You are doing it, my man. And if you wanted to ratchet it down to 15% and you wanted to get

the emergency fund dialed in first, I would recommend that personally to get you in an even better spot financially. Get you a little more foundation. And guess what? At 22 and you get a paid-for house by 28 or 30, now we can really create some serious wealth. But I think that you need to set a vision for yourself. What does 25-year-old Jacob want to be doing? What does 30-year-old Jacob want to be doing? Is marriage in the future? All of that.

That was pretty much it, sir. Just trying to figure it out slowly and surely i'm kind of new to all the budgeting stuff and all that but i mean i've always been pretty decent with money you've done a bang up job without us uh jacob and the ramsey plan is is the way and for your service i want to gift you financial peace University to give you even more education. These nine lessons will walk you through the ins and outs of wealth building, insurance, you name it. You're going to be more equipped. And at 20, John, can you imagine getting this stuff at 20 years old? No, I didn't know what day it was when I was 20. I didn't know what day it was when I was 30. There's still some days you don't know what day it is. Today. This is a weird Tuesday afternoon.

Oh my goodness. Well, that's inspiring. I is a weird Tuesday afternoon. Oh, my goodness. Well, that's inspiring. I needed a win, Jacob, and you were it. A 20-year-old who's debt-free going, I'm just trying to set myself up for the future instead of pay for the past. That's it. That's the whole goal, my friend. You're doing it.

That puts this hour of the Ramsey Show in the books. Thank you to Dr. John Deloney, all the guys and gals in the booth keeping the show afloat. And you, America, will be back before you know it. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you,

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From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined this hour by the one and only Dr. John Deloney. We're taking your calls at 888-825-5225. We will do our best to help you take the right next step for your life, your relationships, and your money. Taylor's going to kick us off this hour in Orlando, Florida. How can we help Taylor? Hi, good afternoon. My question is about two loans that I took out that were really bad ideas. And one of them was a car loan and one of them was for solar panels. And they really put me in

a bad financial spot and I really regret them. And I was even thinking about lowering my 401k contributions, which I don't want to do, because truthfully, I should be putting in more, not less. Got a lot going on here. Let's say we focus on one thing at a time. So how much do you have in the car loan, and how much is left on the solar? The car loan is $335 a month, and the solar is $ 335 a month and the solar is 127 a month okay here's the deal i want you to stop thinking in terms of payments because that's what got you into this right i can afford the payment who can't afford 127 bucks a month and what you need to look at is the actual loan amount. So what is the total loan amounts on both of those that's left?

I, to be 100% honest with you, don't know the exact number. Because when they're selling it to me, that's how they're talking about it, is just the monthly. That should always be a red flag when they're not talking about the total cost of the item. And instead, well, hey, we can do $50 a month. We'll just stretch out the payments, give you a crazy high interest rate, and we'll be out of your hair. That's pretty much what they're telling you. And that's what happened to me at the car dealership because they convinced me to do

the 84-month term, which I didn't want to do, but they were like, oh, what did you do? They didn't convince you. You chose to say, okay, that sounds good. Yep, 100%. Did they tie you back in the finance office and go, you're going to take this 84-month loan, lady? No, they didn't. They didn't do that.

Good. I would have reported that to the police. So let's say... Can we do one thing just for me? It's just for me, and I'll let George get back to the numbers. Will you say out loud, I'm kind of frustrated with caitlin for taking out these two loans i shouldn't have taken out well with taylor or taylor sorry i'm i'm very frustrated

with taylor for taking out these two loans okay this is this is the first step in all emotional health challenges mental health challenges relationship challenges it's ownership of they didn't make me do this i did it i wanted and they were convincing and yada i signed it is that cool yeah it was me in the end it was me that did it all right i love that because now we can go solve this problem now we can solve you can still be mad at them but you took ownership let's go solve it now. I love it. Right. So what is your income, Taylor? I make cake home

probably just under $3,000 a month. Okay. And are you single? Yes. Alright. So the bad news is we can't return the solar. The good news is we might be able to sell the car. So if the car,

let's say the car is worth $30,000 and you owe $25,000, basic math would say you'd get a $5,000 check. Right? Yeah, but then I wouldn't have a car. Well, $5,000 can get you a car, can't it? True. So that's what I would do. That's what I did.

It's what John did. And this is the only path to getting out of this cycle that I think you've probably been in your whole adult life. Not really. It's weird. I spent most of my working life not buying anything but 100% necessity because my goal was to buy a house. And so that was all I thought about was saving up for the down payment for the house. But you didn't have a principal in your life that said, I don't borrow money. Taylor's going to live her life debt free.

At some point you said, eh, I'll take on some debt. It'll be all right. Yeah. And basically like after I bought the house and I didn't have that goal anymore to kind of keep me on track, I was like, well, now that I'm not saving up for a down payment, I can just spend money on things. The first solar guy that shows up, I'll hand him $40,000. So here's the key. I don't think it was, but yeah, basically, yeah. Your income is the key to getting out of this, and you might need to get your income up, and you might need to do about

seven other things. So the question is, if I told you Taylor can be debt-free guaranteed in less than two years, if she follows these recommendations, would you just do it? Uh, I want to say yes. She's not going to do it. That's the right answer. One of the recommendations is going to be Taylor needs to stop investing because Taylor has a priority to get out of this mess and trying to do four things at once is only going to slow down all of it. So how much are you investing right now? Just my 401k. I put 15% in my 401k. 15% of your income is probably a hefty number.

We're talking hundreds and hundreds of dollars. It's like $480 a month. If I gave you $500 back in your life to tackle debt you think it'd make a dent to add six grand a year to your debt snowball i want to believe that i would put it towards the debt but my worry is that i would just spend it well we got to fix that first you got to have this one singular focus that i want to get out of debt because this habit is going to cause you to be back and you're going to be calling us a year from now. Yeah, why don't you trust Taylor, Taylor?

I don't know. I just have, I don't know, like when I have a goal of something I'm saving up for, I can be so disciplined. But when I don't have that goal. This is a goal. You're saving up to get rid of debt. Yeah, this is a goal to save your life. It's an even bigger goal.

It's more exciting than saving money because you're getting a monkey off your back. Right. That's more exciting than saving money because you're getting a monkey off your back. Right. That's true. If you tell us you're just going to go back into debt, then we can't help you get out of debt. 100%. Yeah. And it sucks because if I hadn't taken out the... Because the car I had before was completely paid off.

And then I traded it in for this more expensive car, and I'm just kicking myself over it. The key here is we've got to learn to live on less than we make, and we have to make decisions that will make future Taylor proud. And so that's where the budget comes in handy. And I'm going to gift you every dollar premium, and it's going to help you find these kind of margin activities to where you go, hey, if I pause investing, that's 480 bucks. And what if I got a side job making an extra 500? That's a thousand bucks I can throw with this debt. And then what if I was getting a tax refund every year of, you know, let's say it's three grand a year. What if instead I put that back in my paycheck and now I got, you know, 250 bucks

back in my life on top of that. So you can see all of these ideas, as you get creative and resourceful, start to add some serious momentum to your debt snowball. That's the only way to get out of this without continuing down the path of just trading one debt for another and going, well, I found a 0% credit card, I can put it on, and then I'll do a balance transfer, and then I'll give the credit card company more money to try to move the debt around.

We've got to stop playing the shell game at some point. Yeah, well, I don't have any credit card debt, but that's good at least because I've always been that person who pays the balance off every month. Well, how about you switch to debit card for a month and see if it doesn't change your spending habits? Well, then I wouldn't get the cash back though. Oh my goodness, Taylor. You really think this cash back is a blessing in your life? You think you're winning right now? Well, because I don't pay any interest on the card. You were like a rat in the maze and you got to the cheese and you thought, oh, my gosh, I made it.

And I'm looking above it. I'm going, oh, my gosh, Taylor's in this experiment from the credit card company. Let's get her out. And she said, no, no, no, I'm going to miss my cheese. I got to have my cheese. And I'm going, do you know what they're doing to you, Taylor? Get out of the maze. I'm going to send you my book, Breaking Free from Broke, along with every dollar premium. Call me back after you read it. And I hope we can have a very different discussion. And I want fired up Taylor that is ready to knock down some doors to get rid of this debt. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Open phones at 888-825-5225. We are headed to Pittsburgh, Pennsylvania next to join Caitlin. What's going on, Caitlin? Hi, good afternoon. Yeah, so I'm a younger millennial, and the idea of being a homeowner feels so unattainable for me in a reasonable amount of time due to my current debt expenses and cost of living. And those are mainly my student loans, child care, and rent.

So I'm happily married with one daughter and another on the way, and we're slowly running out of money and room in our current renting facilities. So just looking to see what options I have to meet my goal of being debt-free and also a homeowner where I'm not 45 years old. How old are you now? I'm 28. Okay. 28 years old. You're about to have two kids. What's the childcare cost? cost? Monthly, right now just for one, it's $1,500. But in October, it's going to be $3,000. Woo! I saw a comedian recently

say that if he had just landed on planet Earth and seen a video with no sound of them storming the Capitol, he would have thought surely that was about the childcare cost. I'd buy it. That would track.

It's so expensive. Well, Caitlin, I hope you have a strong household income. You got two working people here? Yes. My husband and I are both engineers. Wonderful. What's the household income?

We take home a little over 12 grand. Woo! That'll knock out some debt. That'll save up a down payment real quick. But here's the thing. I think you want to do it all at once. Yeah. Unfortunately, because we're both engineers, we both got stuck with

student loans. Me, mainly because I was 18 years old, just went to college, didn't think anything of it. It was a private school, and those loans were pretty hefty. How much? What's left? Well, what's left is $100,000. I just went under $100,000. Okay. I'm sitting next to a guy who happened to pay off $100,000 in student loans. Can I tell you, Caitlin? So here's what I hear in your voice. I hear anger and bitterness, like just frustration. Is that true? Yeah.

At who? Honestly, I don't even know who I'm angry at because I can't really blame myself for being 18 years old. Like I wanted that degree, but I just feel frustrated because like I've been told, you know, if you do everything in this order, things will work out. And here I am 10 years later and nowhere near being a homeowner and so i'm just like angry that i can't get what i want essentially there you go so once you once you take that level of ownership i think i get that i don't want to blame an 18 year old i was the same way i just signed the paper i didn't know um but also i don't have to take blame as much as not by my hand but in my lap like i gotta take ownership this i signed my name here we are

yeah and what i would tell you is any energy any energy you spend being angry at this amorphous them the the people who told me this the this it's just energy not going to your family and not not going to work it doesn't solve anything it just it's a decision to make your present miserable the best thing is to get a plan and roll out of it and what i would tell you is having been there i um i sold my truck and i sold my house and I moved my family to a residence hall. And I know not everybody can do that, but I'm just telling you, I had a toddler and we were trying to work on a second kid. And we sold everything just because we had to get sick of it. You have to get radical in terms and let this.

And by the way, I was an associate Dean. I was a professor. My wife was a professor. We had fancy jobs, just like you and your husband, everyone around us looked fancy. All you have to decide. I don't care what anybody looks like.

I don't care this quote unquote, what I think I deserve, what it's supposed to be. I just, in two years, I want this gone. What must be true in our life? So this is all gone in two years.

Is there a different childcare place? Is there a teenager who can come over here? I don't know what the world looks like where you live, but how radical and obnoxious, borderline insane can we get so that this goes away? to be financially responsible. And in the Pittsburgh area, it can be as low as $1,200, but as high as $2,000 for child care. So we went with a cheaper facility and they forgot to feed my daughter. So went into overdrive and like really did digging and we found like a median facility. So like we did, we definitely did try that the first go around. That's cool. But here's what's important, though. Can you exhale that you made a choice on behalf of your daughter? It's too expensive.

It's so expensive. So expensive. And me and my husband made a choice, and it's the right choice. I'm telling you, I'm applauding your choice. As a parent, George is sitting right here, too. We're both applauding your choice. You did the right thing. But we made a choice. We want our daughter to eat every day so um the choice is we're going to spend

1500 bucks a month yes what's your rent um 1800 wow that's amazing for your income so what what would it take let's say you rented a bigger place if you needed it, what's that going to cost? A reasonable place, nothing crazy. What would that move your rent to? So in the Pittsburgh area, most places for rent that we're seeing that's bigger than what we're currently living in is probably $2,500-ish. Okay. That's still very reasonable for your take-home pay. Are you guys doing any investing right now? Retirement plans elsewhere? Definitely 401ks. How much? But again, is it a percentage? I think I just do whatever my company matches, probably like five or six percent. What if I told you you could be, let's say, debt-free in less than 18 months, have an emergency fund a few months after that, and begin saving up for a house,

and probably have that down payment in less than a year at that point. So we're talking three years total, you are in the house of your dreams completely debt-free with an emergency fund. Yeah, that would be great. Now, the question is, what are we willing to do to make that a reality in that period of time? And part of that is, you guys are a young couple making amazing money, and we can pause the investing right now because we're going to get back to it with a vengeance, and instead of 4%, we're going to be investing 15%. And that's just until we get our house paid off,

which is going to happen pretty freaking quick when you're making 12, 13, 15 grand a month at that point with no debt, except for the mortgage. So you see how the Ramsey baby steps kind of unfurl as you get momentum. But most people understandably go, well, I want to pay off the debt. I want to save up for the house. I want to invest in the 401k. I want to have XYZ lifestyle. And it becomes very difficult to accomplish any of it. Yeah. It's so tough to do it all. Yeah. Can I tell you this too, that was shocking to me. How much combined income do you and your husband have? $12,000.

Like a little over $12,000. Okay. On an annual basis? Oh, like you mean like yearly? Yeah. What's your annual take home, both of you? Just approximate. $250, $260 maybe to 60. Okay.

Yeah. You guys make really, didn't we all hear a story that if you made a quarter million dollars a year that you would never think about money, you worry about it. I know. I, I like whenever I got my new salary, I was like so proud of like how much we make as a couple. And then once we look at everything we're like wow we are nowhere near where we thought we would be with this okay that's

the feeling yeah and if you take that feeling and start spraying it all over your neighborhood and in your city it it does it doesn't accomplish anything most I I know people who cross that million dollar line they they cross that first seven figures and they thought it was going to feel a certain way and it doesn't. And it's so frustrating. I thought I wouldn't have to think about this. And then the school calls and then the car break. Like I just thought,

and I thought, and I thought, let's just traffic in reality and get this thing knocked out. It just, it just is what it is, what it is. I'm going to choose optimism and a plan. George is going to lay out for you other than just anger and bitterment and by the way i know that the people pulling up next

to you in the parking lot some of them know what you make or have some ballpark and they're like why are you driving that can you believe she put her kid in that daycare exactly exactly so caitlin hang on the line i'm going to send you a copy of my book breaking free from broke two specific homework assignments number one read the first chapter it's pretty much what you said verbatim. So it's going to let you breathe and go, oh my gosh, someone gets me. Then read the margin is breathing room chapter. There's like 20 things I've gotten there to make more and spend less that will lay it all out. Do that in the every dollar budget with your husband and go, oh my gosh, we're sitting on five grand a month that we could throw towards this debt. We can do this in two years. This is definitely possible.

And you're going to leave with hope and a practical plan if you read that book. So hang in line. We'll send you a copy of Breaking Free from Broke. We are wishing you the best. Thanks for the call. 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 non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country, so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds and do anything you

could do at a physical location. So go to fairwinds.org slash Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. This is the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. And we've got a special treat for you because on the debt-free stage, we have Bruce and Corey.

Welcome, guys. Thank you. Where are you from? Louisville, Kentucky. All right. And you made the drive down. Yeah, we sure Kentucky. All right, and you made the drive down. Yeah, we sure did. I'm glad you said it the right way.

One time I said Louisville, and I was attacked in the parking lot. I think it's a hate crime. We forgive you. Yeah, Louisville, Louisville. We are glad you're with us today. So tell us, how much debt did you pay off? $111,000. Woo!

That's a high number. How long did it take? Six years. All right, and what was your income range during that time? Highest was 100,000, and right now we're at about 70,000. All right. And let's do this. What do you guys do for a living?

Was there a job change? Oh, yeah. I am a stay-at-home mom. That is the best job change. Congratulations. Thank you. Was this during the debt-free journey? Yes. Wow. Yeah. We made the decision. We thought that the Lord wanted us to do it and we thought if we did it, we'd maybe pay off in another two years or something. We did it and we were all finished with debt eight months later. Wow. So you thought it would slow you down more than it actually did absolutely because it probably lit a different

kind of fire when you went this is what's right for our family and we're going to keep full steam ahead for sure and bruce what do you do i'm an electrician wonderful yeah god bless the train and as his shirt says he's the dad of girls outnumbered hashtag outnumbered how many are we talking okay i didn't know if this was one of these like we got nine kids and it's a farm it's Dad of girls. Outnumbered. Hashtag outnumbered. How many are we talking? Two. Okay. I didn't know if this was one of these, like, we got nine kids and it's a farm. It's a homestead. We have a five-month hold at home. Wow.

How are you even here right now? I know. This is a miracle unto itself. I know. Oh, my goodness. This is our first trip with just the two of us. Did you all just make snow angels in the hotel room last night? In the blankets?

No one's screaming. No kid. I don't understand. It's blankets. No one's screaming. No kid. I don't understand. It's awesome. The phantom screams. I think I heard something. What type of debt was the 111? It was our house.

Whoa! Hold the phone. Hold on. Hold on. Guys in the trades and stay-at-home moms cannot pay off homes. Right.

That's not real. It's not true. We're so poor, but we're not. Not at all. This was all mortgage. Yeah. All mortgage. That's amazing. So six years ago, you guys had the mortgage. You were debt free other than the house. What made you go, hey, what if we just go out and went and knock this out instead of looking at this

amortization schedule for the next 25, 30 years? Yeah. Well, when we were only engaged, we went to Financial Peace University together. and that was fantastic. That got us set up to be married and to be on the same page financially. And so even when we bought the house, we were like, this isn't gonna be, we got the 15 year mortgage like what's suggested and we did the down payment that was suggested, but we knew we were gonna pay it off fast

because we were. So here's what I wanna ask because people go, this is outdated and Dave doesn't understand. You guys decided in the face of all that, no, what if we just did a mortgage the right way and that set us up to be debt-free six years later? Well, I didn't want to listen to my dad anymore. Oh, there we go.

That's part of it. You wouldn't say. Yeah, you know, it was just going through your all's class and it was just so convincing. You know, Dave was so convincing and was like, we got to do this. Wow. And here you are now, a young couple, two little kids, no payments in the world.

Yeah, he turns 30 tomorrow. What? Yeah, this is his birthday trip. Oh, my God. We got to do something more exciting than this. But Nashville is a great destination. They pulled up to the parking lot on a pedal tavern, George. Trust me, they've got the weekend.

They figured it out. We pulled up in our hoopty, and I like we're gonna fit in yes this is good be just fine in the ramsey parking lot hey so i'm interested in hearing from both of you what what was your what was money like growing up y'all both come from a lot of money or was money a struggle coming growing up well i didn't particularly come from much money um and uh it was just my dad raising us but uh the thing about my dad is he never did take on debt so so growing up I didn't even know about credit cards and when we got married she was like you should get a debit card and I did and I remember going to the gas station thinking, I hope this works. He still carries cash to this day. He's like only cash. He's still to this day.

You are the youngest living boomer I know. That's incredible. Dude, stay strong, Bruce. That's amazing. So tell us about this home payoff because a lot of people have like, I've seen like there's this TikTok strategy to pay it off faster.

You guys actually did it. So you are the poster children. What did you actually do? You just work hard. You guys actually did it. So you are the poster children. What did you actually do? You just work hard. You make a budget. So your mortgage payment is how much every month if you just paid the normal payment? $1,400. And you guys said, let's put extra on the principal. Was it once a month and you were consistent? No, it was kind of fun. We're just doing the budget and whatever extra we had, we put towards it and it almost became like a game. It was every time we got an extra payment, it was like, yeah. Yeah. At one point in time, we lived off only his income to see if we could be stay at home.

So we just lived off his income and my income went completely to the mortgage. Wow. So every few months when you could, you're like, hey, what if we put an extra thousand or two thousand? What was the biggest extra payment you applied? Oh, there were some big ones because when we got like our taxes back and sometimes we'd put all of that. Like a refund. You go, let's throw that on there. So a few thousand bucks probably. Yeah.

I think it was the COVID checks they were hanging out. I think we put all of them. We were like, we don't need that money. The COVID checks they were handing out. I think we put all those. Oh, yeah, all of them. We were like, well, we don't need that money. Thank you. The COVID checks they were handing out. The government paid off our mortgage. Wow, those Biden bucks came in handy for you. Wow, that's incredible.

What was the hardest part of all this? Because six years is not a short amount of time to sacrifice. Well, you know, we've been doing maintenance on our cars, just keeping them chugging along. Oh, yeah. So probably keeping those cars going. And we did have a lot of naysayers. Like a lot of people in my family would be like, oh, you need a new car.

You need this or just do this. This is the way everybody does it. And we were like. Wait, family telling you what you need. Isn't that your job? Yeah. Oh, my goodness. I can't imagine.

So kind of just putting the blinders on and going this is what's right for our family and i don't care about your opinion because you don't pay our bills yeah that's right that's powerful that's a good yeah that's a good way to say it cory what was money like in your house um my dad was the typical he has credit cards he still does to this day and i love him to death um but um and he has the house payments and stuff like that and he's he's still will today. He'll probably maybe listen to this show and be like, well, I guess you did okay.

He'll be like, I don't know. Here's what I think is so amazing and y'all are experiencing this right now in real time. Your two daughters will never understand the electricity that's in a home when you're worried about, hey, I just did a job for this contractor.

He didn't pay me. Or I'm waiting on that check. I'm waiting on the check. And they got to go get X, Y, and Z groceries. They'll never know that. Yeah. And I'm so glad. Like we do do things cheaply.

We get secondhand clothes and we get groceries at Aldi. But I am glad to show them that. But I'm also glad to show them that it's not from fear. It's from we made a choice and we think this is wiser than this. And so we're not afraid of like spending our money, but we're going to not do it stupidly. Be intentional about it. Yeah. You also not afraid to drop the five month old off and pack up and come to Nashville. Right. So I don't know about that. It's amazing. Oh, it's amazing. So what do you tell people the key to getting out of debt is? Completely.

Mortgage and everything. How do you do it? Well, I think the first thing was going through your class and just having the mindset shift that debt is not good. And after that, the budget is just such a key, key part to it. I love it. Well, we've got the budget for you. Every dollar.

We're going to gift you two subscriptions for a full year. you can use them. You can gift them to someone else to get them on the journey, but that really is the key is paying attention to your money and sticking to a plan. So we're so honored that you decided to join us. Happy 30th birthday tomorrow. What a way to celebrate. What do you tell to a couple out there who's wants to be a stay-at-home mom and married to an electrician? Oh, gosh. Yeah. If you think the Lord is telling you, you can do it.

It doesn't matter. If you make, at one point, we were making $50,000 a year. If the Lord wants you to do it, he's not going to be like, now I'm going to smite you. He's going to lift you up, and he's going to do well to you. Y'all got to go make decisions every day. Yeah. Yeah. Amazing. I'm proud of you guys. It's awesome. I love you y'all gotta go make decisions every day yeah yeah amazing i'm proud of you guys it's awesome love it let's get to the fun part it's bruce and cory from louisville kentucky 111 000 paid off house and everything in six years making 100 down to 70 so cory could stay at home with the kids what a beautiful picture of the new American dream. Debt freedom, baby. Count it down. Let's hear a debt-free scream. Three, two,

one. We're debt-free! Woo! The unity, John, unmatched. They heard it all the way back in Louisville. Incredible. That's inspiring. Making 70 grand, Louisville kentucky two kids normal couple doing very not normal things going hey what if we had a different picture for our family's life what if we could be completely debt-free before we're 30 years old that's inspiring this is the ramsey show i've been doing this show for over 30 years, and some of the saddest calls I've taken are from

situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of all that grief, it's terrible't have life insurance. When you have to think through, how am I going to pay my bills? How am I going to eat next week? Yeah, in the middle of all that grief. It's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that

someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. Welcome back to the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Open phones at 888-825-5225. Here's your reminder that the Live Like No One Else cruise is quickly approaching. Cabins are going fast. More than 85% of the cabins are booked. You don't want to miss this. We are going toks and caco saint thomas puerto rico and the bahamas and who's going it's all of us all the ramsey personalities you hopefully special guests comedians musicians celebrity chefs you name it they're gonna i heard you opened up five more spots because it's sold completely out um you opened up five more spots

for your cannonball competition yeah Yeah, we're accepting applications. Submit your videos. That's right. So there's five more spots left for... DM them to John. That's where they're going right now. He's handling that. It's on the Google Doc.

We are going to have a lot of fun. All the food is included, even room service. You can lounge by any of the pools, the hot tubs. They've got a state-of-the-art fitness center or pickleball courts, which, can I tell you, John and I played this morning, and it was a good time. We got worked over by Ken Coleman, and that is not a... That's the embarrassing part.

That is 100% true. Ken Coleman is... A savant. He is the lord of the Pickleball Court. So join us. We'll be having a good time. Seven days, March 22nd to the 29th, 2025. Ramseysolutions.com slash cruise.

All right, Eric's up next in Des Moines. How can we help today, Eric? Hey, thanks for taking my call. Sure. What's going on? My wife and I are on Baby Step 2 with $70K to go, and I receive child support. It's about $400 a month.

I was curious if we could use that as income or put that into, like like a 529 for college or myself. Okay. So 400 bucks a month, we're talking about five grand a year and you're saying, hey, should we use this for college? Do we use it for living expenses? Should it go toward the debt? Are you just wondering where you should use this money? Yeah, because I don't touch it. You don't need it necessarily to cover the expenses for the month. Yeah, I don't need it.

That's an interesting question. No one's ever asked this question when I've been out here. Eric, great question. What do you think, George? Because part of me says you throw every penny towards this debt, but I can see a scenario where I'm just going to continue to fund this 529. I get both sides of this. How old is he? Yeah.

It's an interesting question. Seven years old. So we're talking 11 years. Do you have any money saved for college yet? No. Okay. And you don't need this money, like you said, to cover his expenses. Yeah, I haven't used it since I've been receiving it.

And you've got $70,000 in debt. How much do you have in savings? We have our $1,000 for Baby Step 1, and then I have a couple thousand that I'm going to allocate towards that. Good. Okay. Yeah, it's an interesting one. There's no, you know, ranging principle around this. I would personally, I would probably put it in college because I'd sleep better at night knowing I was using it toward his future. Yeah. How long is this going to take you to pay off? We used your calculator on your website and it said February 27th.

February 27th? How much money do you guys make a year? I'm not sure per year, but we net $6,400 per month. That seems like the variable you can toggle. Say again? That seems like a variable you guys could adjust.

It seems to be the only one you could adjust unless you've got really high living expenses, which doesn't sound like you do. But, man, I really want to see that down into early 26. Okay. My gut check says, well, let's

not invest while we have debt. And so if you're using $400 of your normal income to cover his expenses, there's no difference in using this new $400 of child support to pay off debt because you're covering all the expenses and more. There's no needs that he has that you're not able to cover. And so I don't see a problem with using that extra $4,800 a year to get out of debt faster. Okay, so put it towards debt.

Yeah, I mean, if you're saying that I have $6,400 plus the $400, is that what we're talking about? Yes. Yeah, and I would even go and try to make more than that. I would try to cut my expenses down because I do think your timeline feels like a long ways away. And I'd rather see you guys in Baby Steps 456 where you're investing for your own future, saving for his college, and by then you might be putting even more away. And you still have time if you got, you know, a nine-year time horizon before he goes to college. Okay.

So, I mean, yeah's there's both both options there my heart says just lean into the baby steps and throw it toward the debt um and whether the money's coming from your income or child support it's all the money that's being used to cover the family expenses and part of that is debt yeah because yeah yeah yeah i i agree with that it took me a minute to think through it. So thanks for talking that out loud, George. But yeah, you're spending that much money on a growing young boy and groceries and the room as part of the rent or mortgage. So yeah, I mean, you're working it out that way. You're spending the $400 a month and more on a kid.

And as he gets older, good gosh, I think I spend about $6 or $7 million a month on feeding my 14-year-old. That kid can eat. It just is. It's working, though. He's like twice my size. Yeah, well, that bar is very, very low. Fair enough. But yeah, Eric, I would get out of debt as quickly as possible. And we do have an article for you, Eric, that we'll send to you.

We'll also link it in the description and show notes wherever you guys are watching America, and it's called What Can Child Support Be Used For, and it's on the Ramsey Solutions blog. So we'll be sure to link that and send it out to you, and I hope that will help you make the right decision for your family. Thank you so much for the call. All right, John, before we take another call here, I want to mention that for all of the folks listening on YouTube or podcast, the show's about to end. And so if you want to listen to the rest of the show, John and I will still be here taking them, but you got to jump over to the Ramsey Network app. It's the only place to get full episodes of the Ramsey Show, and it's the best place to stay focused on your

goals with content that keeps you motivated. It's all Ramsey all the time. And if you're just listening on radio, stay right where you are. The show will go on for you. But YouTuber podcast, jump on over. So you can click the link in the show notes to get the app or just search Ramsey Network in the app store. Go check that out. All right, let's try to get one more in here, John. Zachary is in Indianapolis. How can we help, Zachary? Hi. So I had a house fire a little ways back. And we are going to be, we had originally planned on selling our house and buying another one in contingency. I actually called you and Jade back about two months ago. And you guys helped me clear up that we shouldn't buy a house at the moment. That's not the right time.

I finally talked my wife out of buying a house when we do end up selling this house, but it looks like we are going to be getting a little bit more back from insurance as well as a good chunk from when we end up selling the house. So I was curious on if you guys would recommend just continuing the baby steps in order of the debt snowball, or if you think we should clear up one of these big car payments that we have to get rid of the car first to clear up about $800 a month. What's the total consumer debt you have left? Right now, we have about $75 to $85. I'm not sure on the exact number. And how much is the insurance check?

The insurance we're going to be getting anywhere between $10 to $20. It just depends on reconstruction. Okay. And you're saying, should we use this insurance check to just plop into the debt snowball, smallest to largest? How many debts could you knock out? So I have two student loan debts. One is about $3,000. I haven't started paying on that yet.

I'm not supposed to start until November. But you're allowed to, though. Yeah, yeah, I know. I just got the information to start paying it like less than a month ago. What's the next biggest debt? Start this month. Let's get rid of that. The next biggest is another student loan debt of about $8,000.

Okay. So let's say you knock out both of those debts, debt snowball method, how much is that going to free up payment-wise? Do you know? About $500. Okay. And then we have a new $500 to apply to the next debt on top of our income. And what's the timeline? If you do it that way, what is the timeline to be completely debt-free? Whenever I wrote it down, I wrote it down back right before this whole house fire and everything happened. So I'm pretty sure we estimated around like three, three and a half to four years. I think we need to reassess and go, what is it going to take? What is the gap to where we can get rid of this debt in two years? Because four years is a long time to pay off 75 grand. So I would try to get your income up, get the

expenses down, and do not buy a house. Just plow through the debt snowball. That's what I would do if I was in your shoes. Thank you for the call. That puts this hour of The Ramsey Show in the books. Be sure to jump onto the Ramsey Network app if you're on YouTube or podcast to keep listening and watching. From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by best-selling author and host of The Dr. John Deloney Show, John Deloney. And we are here for you, America, to help you take the right next step for your life, your money, and whatever else is going on. 888-825-5225 is the number to call. Paul will be kicking us off this hour in Columbus, Ohio. Paul, welcome to The Ramsey Show. Hey, guys. Thanks so much for taking my call. Big fans of

each of you. Really excited to talk to you. I need help, your help, settling a debate between me and my wife. Yes, I love these. Who do you think is right? You guys like these. I know. Well, I'm wondering, who do you think is right? Well, who do I think is right? Well, obviously, I think I'm right, but I love my wife. And that's why you're wrong.

My favorite thing is I get to actually participate, and it doesn't cost me. If I participate in this back and forth in my house You gotta pay for it so go for it Alright so we're on baby step two We're crushing it We're able to put about nine grand a month extra At our debt every month

We're gonna be out of debt With a fully funded emergency fund By this time next year Thanks It's a great thing. So two of our stupid decisions that we're nearing the end of are both of our car leases. My car is coming up due in April and hers is coming up in December. Our plan right now is basically we're going to turn her car in, eat whatever fees, disposition fees, et cetera, buy my car out and give it to

her to drive, which is going to cost us about $24,000, and then get me a very, very used car. And our disagreement is essentially on how much to spend on this used car for me. I have no problem spending $3,000 or $4,000, and she wants us to spend around $12,000 to get something a little bit better. She's worried about my safety, and I just want to get the flip out of that ASAP. So her point is basically that the difference would be roughly one month's savings for us. So let's just get something a little better. So I suggested we buy a beater for me until we're on baby step four and then upgrade to the 12K car afterwards. She says that's a waste of money. And again, worried about my safety. So we also don't have any kids, which, you know, I'd understand her point a little more if we did. Our household income is like $300,000 and we're about $140,000

in debt right now. I really want to be debt-free, but I obviously want to keep my wife happy and not have her be anxious every day about my safety. So that's where we're at. I guess my question ultimately is, am I being ridiculous with my stringiness and idea? And should I get a more expensive car to keep my wife happy or should we just get my little beater car and then get the 12k car quicker when we're out of debt what's her name paul her name is nicole all right i'm looking directly into the camera nicole you are wrong you're gonna get some hate mail for that i'll probably get some hate mail to all the nicole's out there sorry i did that just for you paul so you can clip it and just repeat that over and over

in your house make that make that your phone my wife real quick here's that i tell my wife real quick that you're the one that said that and not me i just want to make that no you got to be a grown man dude you live in your house you got you got to own that's true i feel like yeah this is not as black and white as you guys are making it out to be. This idea that if we spend $8,000 more, it guarantees my safety. And so I think there's a middle ground here where you don't have to buy the crappiest car you've ever seen. And you also don't have to get a $12,000 car because somehow an $11,000 car is going to be unreliable. So here's what I would do to put her at ease. I would choose a make and model

that is known for safety and reliability, and I would get a pre-purchase inspection. So, you know, there's no issues here. There's no recalls. And if you do that with a clean title and you do it from, you know, wherever, Facebook, a used car dealership, independent dealership, you will be just fine. I don't think there's any merit to this idea that you're gonna like the car is gonna explode because it's seven thousand dollars new cars have crazy issues new cars have safety issues new cars get in wrecks and so while there are fancier safety issues like their lane departure warnings i i feel like you being a decent driver is what's going to be the determining factor here and Paul a lot of times brother I'm not casting this on your wife okay I'm just putting this out into

the ether a lot of times safety gets thrown around as kind of a conversation ending excuse here's what I see a lot a wife doesn't want her husband parking that car in their parking lot i mean in their driveway or vice versa right and no we say all the time definitely not like that that that's definitely not her she's i mean if anything that used to be me like you know and we've just had such a change of heart because of everything you guys have put forth because of both of your books, honestly. So thank both of you. You guys have really helped us. But I think her thing is just, and this might change things. So we live about, we work both downtown Columbus, Ohio. We both drive to work separately, but we live about four miles away. So to me, it's really not a big deal. She might have to drive this car five or six times

over the course of the next year. And so I think she kind of feels unsafe in that way. So I don't know if that changes your guys. What kind of Oregon trail rickety rickshaw does she think you're about to drive, man? I mean, I'm literally looking at like Honda Civic with 180,000 miles. Yes. Like nothing crazy. Go get an old Camry. Yes. Right. That thing is bulletproof. Uber.

You're four miles away. Well, there's... She doesn't... I suggested that, but she doesn't want to do that because she actually wants to own something. Hey, can I offer a third alternative, Paul, that's really going to make her angry but also make her right? What if you took that $24, dollar car and you sold it and you both got twelve thousand dollar cars yeah you know i so here's the other thing and and that's that's such a great idea the thing is is that again she so we visit my folks a lot in cleveland and so she wants a reliable good car that's able to drive that's 300 miles back and forth that we

can just kind of drive into the ground. Does she know what that means? Like, I'm a subscriber to Consumer Reports, so I nerd out on this stuff. When she just says reliable, what she really means is, is it shiny and does the leather feel new? Is she studying up on the crash ratings? I wouldn't put it past her, honestly.

She's very meticulous. Because if she's a nerd like me, we can go down nerdville and go okay here is a reliable consumer report said in 2012 this was the most reliable car and it's not any less reliable today if it's inspected and maintained right so i i just feel like we can circumvent some of these excuses and feelings and get down to data if that's really what's behind this. And if you're just going dollar for dollar, there are several rental car companies that will drop a car off at your house on a Friday and pick it up on a Sunday. And if you need to spend 300 bucks to do that that weekend so that somebody in the home feels safe, I mean, but that doesn't mean buy a 10 or $15,000 car.

And this is also such a temporary thing anyways. You guys are going to be debt free in a year you're making three hundred thousand dollars the cars you're going to be driving two years from now are going to blow your ever-loving mind and your wife is going to have all the safety features she could ever want let me throw this thing one more thing if you buy a i'm making this up here a 2010 camryry, a 2006 Camry, Honda Civic, and you buy it for $5,000, in two years, it's going to be worth about $5,000. Or more somehow. Yeah, somehow those cars keep going.

So they depreciate it out, so you're not wasting money, actually. In many ways, you're going to turn around and you're going to sell that car for about what you paid for it. You're only driving four miles to work and back, right? I am with you, brother. I want you guys out of debt and I love your spirit. Remember, the Ramsey plan is 20% dollars and 80% psychology. I like the idea of you not liking your car while you're doing this. It's going to inspire you to get out of debt. That's a good word, John. Hope that settles it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. If you

missed it, we have launched the new 2025 Ramsey Goal Planner. It's got monthly teaching from Rachel Cruz, my friend, Dr. John Deloney, who is next to me, and Jade Warshaw. They're going to help you. They're going to be your coaches to help you set attainable goals with your money, faith, and relationships. It's got calendars, of course, stickers, vision boards, goal-setting systems, savings trackers, and of course, all the teaching, and it's just $49.97. So go grab your copy, ramsaysolutions.com slash store. Let's go out to Kalamazoo. David joins us there. What's going on, David? Hello, not much. How are you guys doing this afternoon? Happy Friday. You as well. What's going on? All right, thank you. Well, somehow, someway, my wife and I accrued like $100 thousand dollars in our savings on top of that we normally

yeah i that's not accidental somehow some way you worked your butt off well it listen she's the one who taught me the value of a dollar so all the credit goes to her but the question is this and we generally run a very good cushion in our checking so i can't i don't want to become a crypto, and I don't want to become a day trader. What kind of things should I look to do? We've got to take some of this and put it somewhere that it'll do something for us and actually do something or grow. Well, I'll tell you this, David. The Camel household, we don't save money or invest money without it having a very specific goal.

And I think that's the only place you guys have went wrong is you were just like saving to save. And you didn't know what you were going to do with it. The good news is we can decide that now. So do you actually need this money for a future goal? Not really. The only debt we really have is our mortgage. And we got like $1 000 i mean we're looking at what maybe eight to ten years depending on whether we start throwing a ton of money into it there are more money you know ten years you got 100 grand in savings why would it take

10 years to pay off 111 grand well uh, pay it off next month. Pay off the house. You're saying pay off the house. Does this include your emergency fund, or is that separate? Well, again, I don't... I'm a music guy. I'm not a money guy. So you're saying emergency fund. That's how we kind of look at savings. Okay, so let's say you need three to six months of expenses in the emergency fund. If you added up what your household needs to run for a given month,

throw a number out there. What does it take to cover all the bills? Three months. Let's say 15 grand. We don't have car payments, so I don't know. $15,000. All right, so let's call it $15,000. That means you have $85,000 of money that we can use toward whatever, right?

We're not going to touch the $15,000. Gotcha. Are you guys investing at all right now? Other than our 401s, no. How much are you investing in your 401ks? My matching funds, I'm doing about 8%. I couldn't tell you what my wife is doing in hers. Okay.

But I think, again, both of those look pretty healthy too. How old are you guys? I'm 53 and she is 56. Okay. So you guys must have started talking about the future, what the picture of a retirement looks like. What does it look like when we're hitting 60? Where do we want to be?

How much money? Where do we live? What are we doing? Oh, yeah. So part of that dream is the money part. How are we going to fund this? And so if I'm you, I want to be going into my 50s with no mortgage and investing more than 8% into retirement. Because we don't know what the next 40 years look like of your life.

And so if I'm in your shoes, I would be following the baby steps going, all right, baby step three, that's three to six months of expenses, 15 grand, got that, check. Next, baby step four, we're investing 15% of our household income into retirement. So what is your household income between you and your wife for the year? Gross. About 190. Okay. Yeah, 190. So what you should end up seeing in contributions in your retirement accounts is 15% of that 190. Anything beyond that can go toward the house and that includes the 85k you just mentioned okay so think about that you guys make good money right yeah yeah you don't save 100 grand making nothing so what is your house 190 and you get let's say 111 you pay off 85 that leaves you 26 on the mortgage and now you can start chunking a few grand a month

of this thing and be done in six months? Right? Wow, that sounds a whole lot better than 10 years. I know. David, I think you pay this off in three months. Okay. How old are you again?

I'm 53 okay imagine um so you you have to have reckoned with you're on you're on the back nine of your life right oh yeah okay um so let's let's go a little bit above statistical average and say you've got 35 years left oh thank you bless your heart i got you so 35 years and you've got no mortgage payment it sounds amazing doesn't it oh absolutely now i'm kind of kicking myself for selling our first house well that's the way everybody looked at it. You have to get a bigger, better house. Your first house is your starter home. Maybe, but maybe not.

But here's the deal. Kicking yourself doesn't do any good because you're here now and you like your house. Here's the best thing I can tell you. This is what George and I do in our own homes. I want to have a house with no mortgage on it. Because it's awesome.

And savings without, you know, you can't save your way to wealth. So to leave all this money sitting in savings, while it can grow for a short-term goal, that's great,

it's not going to beat inflation in the long run. And so that's why I want you investing more. And part of that is you're investing into your own future by paying off your house. There's a guaranteed

rate of return when you pay off that mortgage on top of the piece that you have. Yeah, there's a soul tax that you get back. Imagine being able to sleep at night

knowing that if you went running tomorrow morning and you had a heart attack that nobody could ever take that house away from your wife well thank goodness you picked one thing i don't do so i know i was trying to be hypothetical well david i hope this gave you a lot to chew on uh you guys are you're doing a lot of the right things i think we just need a little more focus and intentionality behind why we're doing it.

But very impressive, my friend, and I hope you become totally debt-free in the next few months, like John mentioned. Yeah, very, very few months. Y'all make a ton of money. Y'all can do it. Let's go to Jessica in Lexington. What's going on, Jessica? Hello, how are you? Doing well.

How can John and I help? Well, I am getting ready to start the debt snowball, and I owe taxes. And I didn't know whether to put my taxes in with my snowball from smallest to largest debt amount and start there, or if I should pay my taxes off first. So the IRS said you owe us money. How much? The federal about $12,000 and state about $16,000. Okay. Well, this is a really easy question to answer.

You're going to star all of the IRS debt and go, this is going to the very beginning of the debt snowball. We're going to make minimum payments on everything until this IRS debt is gone. Okay. And there's a simple reason. They can really screw up your life. Garnished wages, jail, you name it. And so I want this gone. How quickly can you knock out that $28K of back taxes?

Next week. I'm a realtor, and so I get pretty good chunks of money. That is the best answer I've heard today. That's literally the best answer. The next best would have been like yesterday. So next week you're saying you're going to get a big commission check. You can knock this out. About $50,000 next week I'll get.

Bye, Felicia. Jessica's selling some houses. Yeah, we're done. Yay me. Yay you. yeah we're done yay me yay yay you so just put at the very top of the debt snowball and then whatever the next smallest one is that's not the irs debt attack that one next attack the next one but it sounds like if you keep this up man i mean john i keep hearing of the housing markets a nightmare and jessica's out here crushing it helping people people. Yeah, I mean, it's just such a wonky time.

I've got my fingers crossed for these rates dropping up here in the next few weeks. I'm hoping that pent-up demand will... That's how you know you're getting old. You're like, when it rains, you're like, ah, we needed the rain. And then you're like, how did these Fed rates come down? These gas prices. Like, man, yeah, we're getting old, George. We're getting old.

I feel it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Open phones at 888-825-5225. Kelly's up next in Kansas City. What's happening, Kelly? Hi there. Hey, thanks for taking my call. Sure. I am calling to find out how much I should help my daughter without enabling her. She's a junior in college. She lives in an apartment, and we made the deal before she left for college that she would be responsible for her groceries and her fund money.

But I received child support, and so I'm not sure if I should be giving her some of that. But I need her to get a job, and I feel like I shouldn't be helping her until she gets a job. And I wanted your opinion on that. I think you're conflating a whole bunch of things all at the same time. Oh. So let's pull it apart a little bit. It sounds like you're frustrated that she doesn't have a job. It sounds like that you feel weird having this money coming in,

and it sounds like you're already supporting her apartment and her tuition. Yeah, kind of. Her tuition is taken care of. Her grandparents are paying for that. We are paying, my husband and I are paying for her sorority bill and the gas in her car. Who's paying for her apartment? Her grandparents. Okay, so how much child support is coming in?

About $900 a month. How much over and above her sorority bill and her gasoline? Let's see. There's probably $300 or $400 left over. If I get it consistently, there's $300 or $400 every month left over. Okay. Does she need more money right now? She thinks she does. is she asking you for more

money yes okay your response right there that's the issue why is she not let me just say it this way i've got no problem and i've worked with college students and their families my whole career i've got no problem with parents sitting down with their kids and saying, we're going to take care of your food, your rent, your tuition, whatever it is, whatever agreement we come up with, and here's your responsibility. I want you to get a job. I want you to get into med school. I want you to make straight A's. Whatever arrangement y'all come up with. I had a chance to be student body president my senior year.

I called my dad and said, hey, could you help out with X, Y, and Z if I get this? And he said, yes, I did, And he did. So I have no philosophical problem with it. But you seem to think she's not working hard or being lazy. Tell me about that. Well, last school year, she was supposed to get a job and managed to squeak through the whole school year without a job. But why does that in and of itself make you mad? Because that's the problem. The problem isn't that she ran out of money. The problem is that she's not making her grades.

The problem is she doesn't have this job. What does that mean to you? I get frustrated because I feel like the only reason that she's not working is because she has FOMO, you know, fear of missing out, you know, and that's, she's, so she just doesn't work. I mean, she did it. She worked during the summer. She saved money during the summer. Yeah. Yeah. You're not hearing what I'm saying. Um, is she making, making good grades? Yeah. She's very good student. She's a good kid. I mean, all the way around. So she's doing everything being asked of her academically for her future career

but it's not enough there's this other thing and so let me ask you i want her to have some skin in the game in addition to making straight a's and being a good student yeah okay then you need to have that conversation because right now she's got her bills covered she does ask you for a little bit extra money you're holding extra money that's literally designed for her and she's making all she's keeping all of her professors happy and she's thinking about her future self by making good grades in the present if you have an additional expectation of her it needs to be honey i'm no longer going to fund x y or z in in 45 days you're on your own or 60 days you're on your own or starting in the spring semester you're on your own but it sounds like you're just frustrated that

she's not working i am because we had that agreement before she left for school is she needed to be getting a job you know once school started you know find something down there in college I got that but was the job for money was the job to pay for something or was it you just need to be out there working the job is for her to pay the utilities okay the job would be for her to pay her utilities and like her little extra fund money okay so does, so is she not paying the utilities? She has so far, because out of her savings account, yes.

Okay. So I should be giving her some child support, some of that. No. I mean, I just think you're mad that she's figured out a way to get through this semester. Because she did work. She just worked this summer, just not right now.

Are you upset that grandparents said, hey, we're going to fund all of this, and you feel like she should have worked more for it all? Because that's understandable. There's nothing wrong with that. They go above and beyond in making sure she gets everything. And does that undermine your parenting? A little bit, yeah.

Because I think that relationship might be the one to address. Is, hey, mom, dad, I appreciate you guys giving her all this stuff and your generosity. It means the world. But I'm worried that it's going to create a sense of entitlement for the future when she goes, well, I'll just ask grandma and grandpa because they'll give me the money if you won't. Yeah, that's exactly what happens. Yeah, I want you to be really clear about what you're frustrated by.

If she was out partying and drinking beer and getting C's and D's and skipping classes and having to drop classes and retake them and calling you and being like, Mom, I need some money. Yes, we agreed you're getting a job and you're working to pay the bills that we agreed on. If she sat down and did the math hourly and figured out, okay, it's going to cost me about this much to have utilities throughout this upcoming school year. I'm going to work this much all summer to cover that.

So that I can make my grades, do my work, and hang out with my sorority sisters. It sounds like you're mad that she's just out there having fun too. No, I'm all about her having fun. I gave her gas money yesterday and it ends up not in her tank, and she bought some stuff off of Amazon. Okay, well, now that's it. That's a big deal because she's lying to you. And now we can have that conversation. That's something to sit down and have a conversation in person.

Is there a deeper issue here? No, I'm just afraid of – it's more of a fear of enabling and and her not trying to provide a little bit for herself and budget it but it sounds like she worked all summer and she's budgeting it throughout the year is that right she worked but she worked about half of the summer okay yeah she she worked half the summer and she saved it and now she's blowing through it. And like I said, once, once some help and I don't mind helping cause I do have the child support,

but I don't want to enable just like I've said. Okay. I, I enabling, I view enabling different than just support. And George, you can, you can pop in if you think I'm wrong.

I view enabling as somebody is making poor decisions detrimental to their life and our agreed upon goals for their world. And we agree on them because I'm helping. And you are making poor choices that are going to cost you or hurt you in the present and in the long term. And I'm going to continue funding that that's enabling i know you are struggling with alcohol and i keep giving you a hundred bucks to go to the bar that's enabling um not making a child have a job and because it's all of it happens to be covered by grandparents by child support by summer jobs i don't see that as enabling i see that as support. But you know your daughter,

and you also know your history. And if you see your history being replayed out in front of your own eyes, that's the scary, scary word between parents and kids called vulnerability. When you sit down with your now adult senior and college daughter and say, I need to tell you about some stuff that happened when I was your age. I'm about some choices. I made some fears, some scary things I see in your life, because if you make it about paying the bills, paying electric bill or paying gas, she's going to figure out a way to pay the gas bill. She's going to figure out a way to pay the electricity bill. And the deeper issue that you have here, which is, dude, I see myself in you, or I see a trajectory for you that you can't see coming,

can I talk to you about it? That's a deeper conversation that just can't be brushed away. So I want you to, as hard as it was for me to follow you, I can imagine it's hard for her. I want you to be really specific about what you're frustrated with. Have that conversation with her in person. And let's be direct. Welcome back to the Ramsey Show, our scripture of the day, Proverbs 10, 4. Lazy hands make for poverty, but diligent hands bring wealth. Leslie Nielsen once said, doing nothing is hard to do. You never know when you're finished. Great, Leslie Nielsen. That's a good one.

R.I.P. All right, let's get to the phones. Joe awaits in Milwaukee. What's going on, Joe? Hey, how you doing? We're doing all right. Glad to be on your show today. We're honored to have you.

So, yeah, so I went bankrupt about five, that's going to be about five years pretty soon. And I have a lot of, well, I've been bankrupt, I went bankrupt because I had a lot of debt on me. So I wanted to kind of like clear up my debt and start over and get everything done. And, but now I'm in, you know, I'm more debt and yeah, I'm almost done paying my bankruptcy. I got one more payment. So you did a payment plan? That's that I'm trying to pay off and I'm just, we're just, well, me and my wife were just paying the minimum on it, you know, and I'm trying to get on the right track to become, you know, debt free because I don't want to I don't want to get out of a bankruptcy to get into another one, you know. So what's going to be different this time? What's going to be different this time is that, you know, we both have a good job.

She didn't have one at first. It was like, you know, hard, up and down things going on in our lives, you know, with kids and stuff. And, well, now she's got a job, but it's just the debt is so much that we have on us that it's just, you know. Well, there's only one way to get into this kind of debt, Joe. You don't live on less than you make. So we have to address the underlying issues here of why are you – what do you guys make a year collectively? Both of us together, about $190 or so. That's an amazing income.

So what is causing you to spend more than that? Just, you know, things that – Is we already had is it just credit card debt you know yeah most of it is credit card debt and there's a student loan and then another loan that i took out that i should have never took out you know how much of this was after the bankruptcy and how much of this are you still paying off of what of the bankruptcy yeah you said you went through bankruptcy about six years ago yeah i'm still i'm still in a bankruptcy i'm not even out of the bankruptcy yet so this is a payment plan yeah i filed a chapter 13 bankruptcy because I didn't want to file a complete bankruptcy. Okay.

So I wanted to pay what I owe, you know, wanted to pay what I owe off, and then... So what is left? If you look at all your debt, what is left? What's the total amount? Right now what's left is the car payment, which is what she got. She got a car out, and it's like $40,000 on the car payment. And this is recent. This is after the bankruptcy. Yeah, this was after the bankruptcy. Who is loaning you money in the middle of Chapter 13?

I'm sorry? Who is loaning you money? Said, yes, we're going to give these people a $40,000-plus car when they're going through bankruptcy actively. Well, she's not in the bankruptcy, so I didn't get the car under my name. So when we filed bankruptcy, she opted out to stay out of the bankruptcy. Okay. Joe, we want to help you during this call. I don't want to run out of the bankruptcy. Okay. Joe, we want to help you during this call.

I don't want to run out of time here. So how can we help you today? Well, I just want to kind of know what steps can I take. Stop borrowing money, Joe. You know, better manage. Joe, stop borrowing money. Yeah, that's step one. Sell the $40,000 car today.

Sell it this weekend. Get rid of it and pay it off. You make $190,000. Stop borrowing money. Sell everything you have. Have you cut up all of your credit cards and closed the accounts? No. I told my wife.

I had a talk with her, and I told her, look, we need to get rid of these credit cards because we can't keep getting ourselves into more and more debt. What does she say? We've got to get rid of this, and the only way we're going to get rid of this is by getting rid of them. We're not going to keep paying them. And she says, no, thank you. We're only paying the minimum on them, so that's the problem, too, because the cards are not going down. I'm checking out some of these cards.

It's 30% interest on these things. 30% interest, yeah. But, Joe, the cards aren't the problem. It's 30% interest on these things. 30% interest. But Joe, the cards aren't the problem. The problem is y'all keep spending more than you make. You used the Chapter 13 because you thought it was a get-out-of-jail-free card. It's not. And you're just making payments like you would have if you followed the baby steps. Yeah.

So here's the deal, Joe. I had a Jeep, too, that we had taken out. But that Jeep, the Jeep, I decided to say, well, you know what? I'm getting rid of the Jeep. So I took the Jeep to the dealer, and I sold it back to the dealer. I told them, hey, you know, what can you guys give me back for it? You need to do that with everything in your house, Joe, with your wife's car, with your guitars, with guns. You need to sell everything.

Do you own a home? No, I don't own a home. Okay. How old are you two? We're trying to get a home because we got four girls, you know, I mean, three girls and one boy. If you do this for nothing else, do this for the kids. Sit down with your wife and say, I don't want to live like this anymore. We have been in this cycle. We're going to be in this cycle again. We're going to be in another bankruptcy if things keep going this way. We're done using credit cards. We're done borrowing money. We make too much to be this broke. And it stops today. We're cutting up the cards. We're selling the car. The student loans are gone. We're going to start attacking this with the debt snowball. Are you on board? Because this is where I'm taking our family. What would she say yeah i mean she she i'm pretty sure she would say yeah because i mean she's you know she's in you know i've talked to her and i've told her you know and then she's like yeah you're right you

know we can't keep we can't keep on okay have a ceremony tonight with your kids let your kids come we're getting rid of every credit card we have let them watch you cut it ups y'all make so much freaking money joe what is the total amount of debt that you owe? Give me the total amount. About $85,000. You make $190,000 and you owe $85,000. We can be done with this thing in less than a year. Do you believe that?

Yeah. Yeah, and that's my goal because, like I was telling my wife, I said, I don't want to get out of a bankruptcy to get into another one. Joe, here's how this works. I'm almost done. Ask a third grader to crunch the numbers. $85,000, 12 months, that's $7,000 a month. Come hell or high water, we are putting $7,000 a month of our amazing income toward this debt.

And we're never borrowing money again. As for me and my family, we're done. We're complicating this. It's not hard hard you'll have the money if we do x y will happen joe i want to hear you say joe i will never borrow money again say it announce it in front of america no i will never borrow money again it's stressing it's stressful you know it's like be done you know i i i'll you know i don't need it you know okay be done let today be the first day of your new life like walk towards the light my man we're done we're done you make so much money you're done in one year you're free

and you and your three daughters and your son will no longer like live in a home that is just crackling with anxiousness because you're still ashamed and embarrassed about having to file for bankruptcy and then you did the same stuff over again. It's like almost dying from liver failure because you drank poison and they gave you a new liver and then you start getting more poison to drink. Stop, just stop.

Be done in one year. This is basic. Like George just said, it's third grade math. 12 divided by 85. And by the way, I'd cut this in half and I'd sell your wife's car tomorrow. That would knock you down to 45? You're done by Christmas.

Even if she just got it last year. It doesn't matter if she just got it. And please don't take it back to the dealership. They're going to pay you $20,000 for it. Sell it private party. And whatever you get, pay cash for a beater car, a $6,000 car. They do exist. Get a $100 pre-purchase inspection, and you will be so much closer to debt freedom.

Aren't you done doing this? Yeah. I wanted this to be done in a few months. I'm done. And, you know, I told her, And I told my wife and I said, we could have waited on the car. No, we're done. Let's move forward. You were complicit in her decision. Yes. Because my wife and I, we don't make decisions where she just goes, well, I'm doing it anyway because I want a car. That's not a marriage. So I wish you the best, Joe. We're

going to send you Financial Peace University. If you can promise me that your wife and you will sit down, watch all nine lessons and then go, we are done. We're going to send you Financial Peace University. If you can promise me that your wife and you will sit down, watch all nine lessons, and then go, we are done. We're going to make a plan. And in six months, seven months, we're completely debt free and we're never touching the stuff again. It has not been a blessing so far and it will not be in the future. That puts this hour of the Ramsey Show in the books. Thank you to Dr. John Deloney, my co-host, all the folks in the booth keeping the show afloat, and you, America. Until next time.