The Ramsey Show - App - Don't Let Debt Happen To You—Face It Head-On

Episode Date: December 31, 2024

While we're out for new year's, we've compiled some of our favorite George and Rachel calls from the past couple of years. Enjoy your day and we'll be back with a live show in the new year! Happy New Year! George Kamel & Rachel Cruze answer your questions and discuss: ‘My sister took advantage of our sick mom’ ‘$200K in consumer debt, declare bankruptcy?’ ‘My husband's boss is a pig, should he leave?’ ‘Restaurant waiters are keeping all my cash' ‘How do we handle our son's car getting stolen?’ 'How do I become a $100 millionaire by 30?'

Девочка-пай live from the headquarters of Ramsey Solutions it's the Ramsey Show where we help people build wealth do work that they love and create amazing relationships I'm George Campbell joined by best-selling author and all-around great person Rachel Cruz and we are here for you America answering your questions about money and life and all of the predicaments and challenges and maybe some wins that you're facing. 888-825-5225 is the number to call to join the conversation. Olivia kicks us off in Buffalo, New York. Olivia, welcome to The Ramsey Show. Hi, thank you so much for taking my call. I'm a huge fan of The Ramsey Show, especially Dave. He's awesome.

We agree. Yeah, love him. So my question for you all today is, my sister took advantage of our sick mom, skipped town, and stole my inheritance. What should I do? Oh my gosh, Olivia. What do you mean took advantage of your sick mom?

Took advantage. Well, okay. She took over the family business, even though it wasn't left to her. She convinced my mom to become the power of attorney and health care proxy and transferred all money to her own account. Oh, wow. Wow. She also sold my mom's house and moved my mom into the family business. Into the business? Into the, like Into the office? Yes.

Okay. What kind of sickness does your mom have? She had cancer. She died three months ago. Oh my gosh. I'm so sorry, Olivia. Do you have any other siblings? No. I'm the eldest. I'm 40 years old. My sister is approximately 37 years old. She lived with both of my parents who passed from cancer and she has skipped town and has not buried my mom. Where is your mom? She, she, sorry, my sister has her ashes. Okay. Oh my gosh.

Did you and your sister have a relationship before all of this? We did. It was, I thought it was a lovely relationship. Um, and then things started getting weird when my father passed away five years ago and then my mom got cancer and I believe she felt entitled as the power of attorney to all money, all estates, all inheritance. And she's gone. She changed her number. She left town.

So from a legal standpoint, did your mom have in your dad, you know, any documentation legally, like in a will of what your inheritance is? And then she went and changed it as power of attorney? Or is there a will out there that you are owed essentially your inheritance? There is a will that my mom wrote. I have never seen it. My sister attempted to change the will one month prior to death, but they never got it signed. So there is a handwritten will. I'm not sure if it was done with a lawyer, but I've never seen the will. Okay.

And you have no point of contacts for anyone that might have information on this? I've tried to reach out to the lawyers, and they said, I'm sorry, Olivia, it was never signed, therefore it's not valid. Well, yeah. And they have no version that is signed. Correct.

Oh, man, Olivia. The question would be, do I keep my own peace and sanity and money and move forward with my life, Or do I try to fight it? Essentially, yeah. I mean, the only issue with all of that, because I don't mind the fighting injustice. I mean, we're not scared of that, but I don't know if you have any legal documents that will uphold in court to fight your side.

Like, I don't know if there's any legal documentation to show your side, because from a legal perspective, you could be lying as much as she is. Right. I'm not saying you are, Olivia, but like there's no there's no proof otherwise. We need some kind of paper trail. There needs to be like some some level of documentation to in order to when you hire lawyers for them to fight this in the court system. I just don't know if you if you have that.

Have you contacted a lawyer? Yes, I have. What did they say? That was a lawyer. He said that it may not be worth it because number one, there may not be any money left over. That's true, yeah.

And right, so it may cost five to $10,000 for a lawyer and I may not get anything after all. Yeah. How much was the estate worth? How much did your parents have? Do you have any idea? The house was sold for $344,000.

There were many liens against the house, and my sister has all of that money. Okay. So there were some liens. Was that all of your inheritance or was there other money that was supposed to be given to you? That was probably all of my inheritance. Okay. So it wasn't retirement accounts, other assets, cash, things like that. No, there was the family business, but that's another topic. I believe just the money from the house would be part of my inheritance yeah i mean that would be 120 for you if you just 50 50 and then we don't know all these liens against it the liens against it too would be would be diminished too so i'm like i don't know if there would be much here for you based on how complicated this whole thing

is and was i agree oh olivia well what's so hard is I'm like, you've lost your mom. There's a feeling of no closure. Lost your sister. Lost your sister in this. There's no closure. I mean, the whole way it went down for you, Olivia, it's just terrible. And I wish I had better guidance or direction for you to get some justice in this, but I... Do you have any money right now? Yes. How much? Oh, myself?

Yeah. Oh, yes, I work. I make $70,000 a year. I'm a surgical nurse. I'm married. I have a dog. We're doing just fine. This situation is a strange one it's very sad

and you're in fact right I lost mom, dad and a sister yep yep and even the closure with your mom and her Ashley you know what I mean like that would probably be the step I would take of trying to get contact with your sister. But you have no way to even know where she is,

how to get in touch with her. She is off the planet at this point. Correct. Yes. She had three cell phones. She changed the last number and has not responded via email. We did have a lovely funeral for my mom in church. She attended that funeral, but since then, she has taken off with the ashes and all of the money. I don't even understand that part. That just feels so strange. Well, I mean, Olivia, honestly, if I were in your position,

and as much as you can find the closure in it, I would. It's so sad to say you close a chapter in a book from your family. But she sounds crazy. The way you presented it to us, she sounds crazy. Almost dangerous if you did pursue her. Yeah, that's right. I'm like, she stole. It's immoral, the things she has done.

And so if I were you, I would create, I mean, not that you have to even draw boundaries because there's no relationship there. But I mean, I would in my heart just, there's a level you got to just say, all right, that I'm done. I can't, I'm not going to keep fighting and in this wheel because even that with the inheritance and all of that, it just muddles the piece

of what's happened with your parents, you know, at that point. And so for you, Olivia, I think it's in the healthiest retrospect for you to move on. Hang on the line. I'm so sorry. I'm going to send you a copy of Dr.

John Deloney's book, Own Your Past, Change Your Future, to help you grieve all this. This is The Ramsey Show. I'm George Camel, joined by Rachel Cruz, who is also my co-host on Smart Money Happy Hour. So if you're looking for some fun, some levity, some entertainment with a healthy dose of financial teaching, some levity, some entertainment with a healthy dose of financial teaching, kind of, it's kind of a... Do it all. Yeah. A spoonful of medicine, a spoonful of sugar makes the medicine go down. I think that's what Smart Money Happy Hour is. That's what it feels like. And people are loving it. Kids listen to it. They're like, I listen, my 10 year old loves it. And then people are like, I'm 75 and I love listening

to you guys. So something for everyone with Smart Money Happy Hour. We're all there. We're here for it. So check it out this weekend. You can binge all the episodes that are out there every Thursday. All right, Claire joins us up next in Seattle, Washington. Claire, welcome to the show. Hi, thank you for having me.

Absolutely. What's going on? So I'm turning 18 years old this year and I really, really want to learn more about investing and where to start. I work as much as I can with school. I have some money in my checking account, some money in my savings account, but I've heard so many different options about investing in an IRA, doing real estate, all of this, but I'm just turning 18, and I really want to know what you

guys recommend for young people looking to start investing. That is awesome. Way to go. Well done. So you're graduating soon? I'll graduate in a year. I'm going into my senior year this year. Okay. And what are you doing for work? I work at a small cooperative in my kind of small town. It's like an agriculture store almost. Okay. And what do you make there? A little over $16.50 an hour. Cool. And how many hours are you working? It's usually fluctuates week to week between 16 and 20 hours. Awesome. Way to go. And is your GPA solid? Yes. 4.0.

There it is. You're amazing, Claire. Because I was just thinking in my head, Rachel, you know, people who work 15 to 20 hours while in college have a higher GPA than those who don't. And there we go. And you proved it. Okay, so you are a rock star, number one. Do you have any debt? I do not, no. And how much do you have in checking and savings?

Savings, I haven't really been sure what to do with it, so I have maybe around $700. In my checking account, I have over $3,000. Way to go. Gosh, you're doing so well. Okay, so I would set aside a little bit of that for kind of a starter emergency fund for you. Obviously, you don't have a ton of expenses now. Are you living on campus or on your own? I still live at home. I'm enrolled in a local community college. So I live at home and it covers my tuition. So I am still at home not paying anything for that. That is awesome.

Great job. Okay. So let's talk about investing. I think the Roth IRA is your best bet right now. Okay. Invest into that in a good growth stock mutual fund. You can diversify it across the four types that we talk about. We have a great investing guide on our website. I'll make sure Austin gets you a link over to that that can help kind of unpack this at a deeper level than we can do on radio.

But I think trying to, I don't know that you would max it out with the income that you have, but getting to that Roth IRA and consistently putting money away is going to be your best bet at 18. Okay. I don't think you need to worry about all the other stuff and all the noise you're hearing. You can stick to a Roth IRA. Once you start your career, you'll probably have an option for a Roth 401k, and that's another great place, and start doing 15% at that point. Yeah. Once you graduate, Claire, I mean, having some cash on hands between graduation and entering the real world and career, it's always good just to have some because you may be moving.

Who knows what kind of, you know, if you take a job. It could be deposits. You might need to get a car upgrade. That's right. Repair, maintenance. Just kind of having some cash for that transition, just thinking through that. And then once you kind of get settled, which I have a feeling you'll probably settle pretty quickly because I think you know what you want in life. You're very proactive.

So once you, yeah, have that first job and you're settled in to where you are and got your first apartment, whatever it is, and you're renting, that's when, yeah, the 401k, I would look into something like that. But for now, I'm with George. I think having cash on hand and looking at a Roth IRA, I think it's going to be your best bet. Yeah. And if you want help setting that Roth IRA up, you can get connected with one of our SmartVestor pros, which they don't work for Ramsey, but they are vetted investing professionals that we trust.

And if you go to RamseySolutions.com, click on Trusted Pros, you can connect with one in the Seattle area and they'll get you started there. Way to go. Awesome. Let's go on to Brandon in Dallas. Brandon, welcome to the show. Hello. Can you guys hear me? You sound great. Yes.

Awesome. Hey, I have a question. My wife and I have gotten ourselves in a really bad spot. So we have about $250,000 in consumer debt. That's credit cards and personal loans. We're just not sure what to do. We don't have enough income to pay all of our minimum payments. And so we're not sure if we should file bankruptcy or just stop paying until we can afford to settle. We're just not sure where to go from here. What caused you all to go $250,000 in credit cards and personal loans? Well, it's everything you guys say not to do.

We decided, I decided, I should say, to flip a house and then buy two more houses with a lot of leverage. Right when interest rates went up and we ended up taking a, a really big bath on these three properties and we lost money on all three of them. I'm so sorry. Yeah, it's, uh, it's definitely been tough. And, uh, and on top of that, during that time, I was so focused on that, that, uh, I'm in real estate and my production, um, pretty much went to zero during that time. Cause my mind was just so wrapped up in that. So that's where we're at, and we're just really not sure where to go from here. How old are you guys?

I'm 28. My wife is 27. We have a two-year-old daughter, and we have another that's going to be arriving in October. Oh, my gosh. You know, it's wild, Brandon. If you're familiar with my family story story that little baby that's going to be born that was me and my sister was two years old when my parents filed for bankruptcy um and through real estate issues i mean dad did exactly what you did but on a massive scale and they called all of his notes and he uh if he was sitting here today i think his empathy would be at the highest level because he was literally you 35 years ago, which is pretty wild. So I have such like a heart for those kids and your kids and your wife and all of it because I know you guys are under a lot of stress. And I know there's probably a lot of shame and embarrassment and you feel a lot of the weights. And so I hear all of that. So my question would be, how much did you make when you were in real estate and your head was not all over the

place with these other rentals and you were so focused on it? What were you bringing in? So, I mean, I would average probably somewhere between $9,000 and $10,000 a month. My wife also works. She brings in about $5,000 to $6,000 a month. Um, my wife also works, she brings in about five to $6,000 a month. Okay. And what is the case today? What's kind of the average month for you guys? So, so right now she is still bringing that five to 6,000 a month. Um, I've just rededicated myself to real estate, um, as of last week. So right now it's, it's nothing. Um, you know, ideally in the next, if I'm realistic, maybe 90 to 120 days, we're going to start seeing some proof from all the work I'm doing today.

Okay. Yeah, Brandon, I don't think you're not, you're not bankrupt. But I would say catching up on those minimum payments is your number one goal. And Brandon, I, in your future here for the next probably two to three years, you're going to be doing more than just real estate. I mean, you're going to be doing side hustles at night. You're going to be exhausted. You're going to be exhausted because the amount of effort that you guys are going to put into this, because I believe you can, to get out of this hole, it's going to take a lot and you're going to be really uncomfortable and it're going to, it's going to feel like a sacrifice because that's what's, that's what it's going to take to get out of this. And you guys have to, I was gonna say, promise us, I mean, more promise

yourselves that you align in the sand is drawn. And for your kid's sake, you will never ever go back to this again. That debt is off the table a hundred percent. Cause if you keep dabbling in Brandon, I'm telling you, you're going to go right, you're going to look up again, you're going to be right back in this position. So you guys need a mindset shift, you and your wife,

and draw a black and white line and say, never again, we're not doing this. And for the next three years, our lives are going to look a whole lot different and it's going to be really hard with those babies at home. But Brandon, you're going to be able to do this. You guys are going to be able to get out of this, but it's going to take a lot with those babies at home. But Brandon, you're going to be able to do this. You guys are going to be able to get out of this, but it's going to take a lot of work and a lot of sacrificing your lifestyle

for it to put every penny possible to go towards this debt. Brandon, you said it was $250,000 total? Yeah, but I do have kind of a wrench to throw in it. So I guess two questions. Number one is total debt payments. We have around $6,000 on top of living expenses of around $9,000. So number one is we're just not sure, like, how do we actually cash flow this thing? Like, what do we let go?

Okay, here's what I'm going to do, Brandon. I'm going to gift you guys Financial Peace University and EveryDollar Premium to get on a plan. But looking at the math on this, it's just a math equation. Can we throw $7,000 a month and be done in 36 months? It comes down to something that simple. Hang on the line. We'll get you a plan. But looking at the math on this, it's just a math equation. Can we throw seven grand a month and be done in 36 months? It comes down to something that simple. Hang on the line, we'll get you those resources. Hey, George Camel here with a not so fun fact. Every American social security number, including our children's, has been hacked and is now on the dark web. And this is not a scare tactic. This isn't fear mongering. It's a reality that could turn into a nightmare for a lot of people. And believe me, I've been a victim of identity theft, and I would prefer

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yours too. So get enrolled today by calling 800-356-4282 or just visit zander.com. That's Z-A-N-D-E-R dot com. This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Hey, if you're a fan of the show, which I assume you are, if you're taking the time to listen to us right now, we would love for you to subscribe to the show, to follow wherever you're listening, leave a review, be kind, and share it with a friend who might enjoy this show if they're looking for some hope in their life and their money, we so appreciate that. That is how we spread the word and create more impact. All right, let's take some more calls here. 888-825-5225 is the number. Emma is in San Bernardino. Emma, welcome to the Ramsey show. Hi guys. Thanks for having me on. Sure. What's your question?

Um, so my husband is a real estate agent and he's been with a company for about three years now, but his boss is very inappropriate. He's had about three lawsuits against him for sexual harassment. He only hires employees who are under the age of 25 and blonde and skinny. Is his boss Leonardo DiCaprio? This is wild. Yeah, and he makes really inappropriate comments about women. had an affair with an employee and the employee got mad at him for whatever reason and sent out a huge email to tons of different lenders and other agents and just basically saying, don't hire these people, don't work with them. And I don't really want my husband to be with

this company anymore because of his boss. Emma, how does your husband feel? What's your husband say about all of this? He kind of, I mean, we haven't really talked too much, I think, right now because my husband's making good money. I don't know if he will really be open to that, but I'm worried something major is going to happen soon. Oh, my gosh. It feels like you want to stay in the band on the Titanic because of the money,

but we can see it sinking. Yeah, that's the perfect way to put it. So I think he needs to see the writing on the wall going, this guy's got multiple lawsuits against him. People are trying to actively take him down. The money may be good now, but number one, at what cost of your soul and sticking around with a guy of this level of integrity? And then number two, going, this money may not be around a year from now as word gets around in the real estate world. Yeah. Is he on like a certain, is he on a certain commission system? Because if it's like with a company or a brokerage, can he just change brokerages yeah i mean he's had

other uh agencies reach out to him because he is a really good real estate agent he sells a lot and that's usually most of the time that's where you're going to find that you make the money as a real estate agent is you not necessarily the company now granted there are some more companies that will put marketing dollars behind you and all of that but uh but he's the secret sauce your husband so regardless of where he got to where he goes he'll be able to perform and yeah continue to make great money so my big thing emma is i would talk i mean i would be talking to him about it and uh just make your feelings clear i'm not comfortable with you working around this guy because of his. Like the guy is a creep. And it's like, if he's a creep with other people,

like I'm like, oh, I don't know. You just don't want to be around that. And is he doing weird business? Like usually when you have a lack of integrity in one area of your life, sometimes it spills into other areas. So I would even, I would just be worried from that. And this guy's not even trying to hide it.

From like a cultural standpoint, it's really toxic. But then also who knows what he's doing behind the scenes with yeah this is just the tip of the iceberg like to keep the leo and titanic references going yeah yeah i mean they've had their place vandalized because he slept with a married woman who was an employee and her husband found out so like three guys he hired and came and just broke windows so yeah so so we yeah so the boss is one thing right but it's you and your husband that need to make this decision and so that's what i want to focus on and so the fact that you haven't brought it up to him yet or that it hasn't been a conversation um yeah i mean i that that's more of a like a okay here's what's

in my control is hey i can actually whatever the boss decides to do with his life that's his issue but my issue here is that my husband is part of a company that is obviously just a complete they're not jumping on the lifeboat at all anytime soon as well for keeping the references going you're welcome so emma i would put your life vest on put the life vest on and let's find him another job. He's a fantastic real estate agent. And that is the common denominator here. Not this magical agency that's about to go under. And talk to your husband about it. And the fact that you haven't yet, I'm like, hmm, I mean, I don't know. That's interesting. If it bothered me enough to call a national radio show,

it's going to bother me enough to have a conversation with my spouse. Yeah. So have that conversation, Emma, for sure. All right. Let's move on to Minneapolis, Minnesota. Jeremy joins us there. Jeremy, welcome to the show. Hey,

George and Rachel, how are you? Doing great. You sound defeated, Jeremy. Have you just been waiting on the line too long? Oh my gosh. Let's see,

when did I start? Well, I'm in central time, so I started around two, so I've been in here about an hour and a half, but not that. So sorry, Jeremy. Sorry, Jeremy. We really appreciate the marathon.

You really stuck it out there. Thanks. My admin will be sending you a bill, so it's okay. So I have more of a money etiquette question. So my wife and I, when we go out to eat, we usually pay cash. And so let's say this was a couple nights ago we were at olive garden and our bill was 45 30 i leave 320s on the table server comes over and to me i just kind of assume like you know what it's kind of high they'll probably just assume to bring change well they, they go to just take it.

And they start like, okay, have a good night. And they take it. And I'm like, wait, I'm like, you're bringing change, right? And then she got very kind of visually upset at us. And this has happened more than you would think when we go out to eat, like just constantly servers kind of just assume whatever money's on the table, guess they just keep so all you gotta do jeremy yeah all you gotta do is say hey uh here's 60 bucks um can i have some change please like do you just be proactive so that they're not that they're not wondering right or just tell them exactly how much change

you want back oh you could do that too like hey we bring yeah that's fair so one time we were at a different uh place and so our bill was like let's just say it's 35 and we had two 220s and or maybe 320s so we can't give them the 40 and just say keep because it's five bucks kind of lame um and so then we gave him 60 and we're like okay can you break up this 20 for us so we can leave a tip for you like okay so then he came back with change so let's just say it was 35 we give him 60 i would expect to get 25 back but then they came back with like a 10 and two ones and sounds like they're just not good at math well they're just factoring but you're saying they're manipulating the the cash system to bring you back a certain bill so that you leave the

$10 bill you can't you know exactly yeah i mean it's yeah either in the situation you just ask specifically what you need um and i know you said yeah change but say like can i have two fives like you gotta just be really you could just be really specific or just leave them an extra $5. Well, that's what we did with the other kids. We're like, you know what? We don't care about this. This is a really silly solution, but you could just get smaller bills and just have those on you when you're out to eat.

Not just have twenties. That's fair. That's an option. I do that for my haircut. So this is a great example. I pay cash for my haircut to get a discount. I just went today and I go to the bank next door and I'll break the 20. I'll get a 10, 5, and 5 ones so that I can give him the exact amount with tip included. But see, the hard thing is you don't know how much you're going to pay for the meal, of course.

But the idea here is you've got a five, you've got some ones. You've got some options. You've got some options. Yeah. When we started doing this, I was like carrying hundreds with us. And I was like, okay, this is. Jeremy's balling out at Olive Garden. I love it.

Yeah. But the problem is I feel very, I don't want to say bad. Don't. Don't be shamed. Yeah, don't be shamed into it. I'll just say we feel very shamed. That's a good way to put it. Yeah. Because you're asking for change back, they look at it like, oh, he's so cheap. He doesn't want to leave us the 15 bucks.

Well, right. And it's like, I hate, I absolutely hate being manipulated. So it's more of that case. Yeah, I would be proactive and say exactly what you need back. Communicate up front. Yep. And then that's their issue, Jeremy. As long as you're tipping well, you know, 15%, 20%, 25% if it's great, there's nothing to be ashamed about.

And that's their, I mean, at that point, that's their problem. They love cash tips. So they should be grateful that they're not having to wait to get that, you know, at the end of the month in a check. So you're doing the right thing, man. Don't be ashamed. You're doing great, Jeremy. You're doing great. Release the shame. Yes. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage just somebody else's. Plus, rent means instability in your budget because it always goes up,

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This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. We're back with more of The Ramsey Show. I'm George Campbell, joined today by Rachel Cruz. And it's your show, America, so give us a call, 888-825-5225. Melissa joins us up next in St. Charles, Missouri. Melissa, welcome to the show. Hi, thank you for taking my call. I appreciate it. Absolutely. How can Rachel and I help? We're hoping you can help my husband and I and our son make a very tough decision that needs to be made very quickly. Ooh. Okay. Yeah.

Stakes are high. Yeah, it's high. My husband and I bought a car for our son in 2019. It was a 2018 Kia Soul for about $14,000 plus taxes and registration. During that time, we had to put a new engine in there. So we've invested probably another $6,000 in that car in the last couple of years. Last year, he was in a car accident. It was deemed his fault. So we put a claim through our insurance. They fixed it. But then this March, when it renewed, they dropped him. so we had to go through a broker

to get a new insurance um and it was at about twice the premium of what he was paying but we we had to do it so you have to have insurance so now he's got this new insurance since march and then the unthinkable happens monday night His car is stolen. Oh, my gosh. Now we're in a very worse condition because the argument between my husband and I is, do we put a claim through? Because we know what's going to happen when that renewal happens next year. They're going to drop us. And then the insurance is going to go.

His premium is going to go even higher. And we talked to our broker and he pretty much confirmed it. Yeah, it's going to go even his premium is going to go even higher and we talked to our broker and he pretty much confirmed it yeah it's going to go up um he doesn't know how much could be as high as 800 a month he just he doesn't know for sure so the tough decision we're trying to decide is do we do to put the claim through and risk our son being straddled, strapped with a high premium for years until it drops off? He said it could take up to five years for the drop off. Or do we bite the bullet, kiss that money goodbye on that car and pull money out of our savings and help our son get another used car? How much would you have been able to get for it? Is it at $20,000? We believe around $12,000.

Okay. And he's got a $2,000 deductible. So we'd be walking away with maybe $10,000 to put towards another car. The unknown factor is what the premium is going to end up being down the line. For sure. What are you paying now for the insurance? He's paying almost $300 monthly. He's 21, so he's at that high risk, so he's already paying high to begin with. Well, I'm just going to do the math and go, okay, let's say, you know, have you talked to an outside, you know, third-party insurance agent to get an estimate on what this could be? Yes, this is the same broker that got us his insurance just this March. We called him him and he's saying he could add 800 a month potentially or just up to 800 it could be it could be because he now he's got to go out and

find someone else that's going to insure him with a second claim yeah and he said it could be it could be as high as 800 a month he doesn't know well if it's 800 a month absolutely it's not worth it because that's 10 000 a year yeah that you's not worth it because that's $10,000 a year. Yeah. That you're now paying to file that claim to get $10,000 one time. But that's a worst-case scenario. That's a worst case. Right.

So that's where I'm going. Is there a way to figure it out without running the claim? I don't know that there is without actually running it through your insurance. Yeah. You say you could start doing some research for us, but, I mean, he would have no way to know exactly what that amount is. He's just given us the worst case. So I don't know. My husband feels like we invested so much money in it. That's why you pay premiums. We need to put the claims through it. We need to get recoup some of our loss. I said, yeah,

but as a parent do I want to strap our son with this huge, pretty possible huge premium. How did the car get stolen, Melissa? Where was it stolen out of? It was in a parking lot. In a parking lot, it got stolen. They just like hotwired it and took off, or was the key in there? The key wasn't in there. I guess they somehow got in there and got it going.

And you can't find it. I mean, it's gone. Have you reported? Police report and all that? Yeah, we did the police report. And unfortunately, the police is not responding. We've been calling for days to get an update because we've never had this happen before. So we checked online.

They said, oh, wait about five days. Sometimes it shows up. Yeah. But we can't get the police to call us back to get any update. So we're going to assume it's gone. It's at a chop shop. It's gone. And we've got to make decisions because he's got a job. It's already become inconvenient trying to get him to and from work.

So that's why I say it needs to be quickly decided. How old is he? He's 21. And does he have any money saved? Not much. A little under $3,000 saved. He doesn't have a job that's like a career job right now. He doesn't have a job. It's like a career job right now. He's still working at it. He's just not there yet. And do you guys have money to basically gift

him a car right now? We do, but my husband's a little irritated because we've already done that once. Yeah, and there's a part too, Melissa. He's 21, you know? Yeah tough he's got it he's kind of got to get some skin in the game here yeah I would want well he was paying us back he paid us back for the motor he was paying us back a half of what the car cost so he was putting get you know he was contributing yeah um but it's just horrible timing he wasn't done paying his half of the car. And it's just, we're just all just not sure what to do here. And I thought, well, let's call the guys that know about money. What makes sense? Yeah. It's hard to do when the numbers are so variable. Cause usually we just look at the math and go, is this going to ROI? Does this make sense to do from a mathematical standpoint? But

there's too many unknowns here to say for sure, do this. Now, if I'm in your shoes, I might just save up and get him a cheap used car instead of... That's exactly what the broker said. He said, I asked him, I said, what would you do if it was your son? He said, I would just get a cheap car. We're not going to get him a $14,000 car. We're going to get him a $4,000 car. You know, and I thought that too, and I started looking, and then I realized I remember Dave Ramsey said about, oh, it's COVID and these car prices are through the roof, and oh my gosh, they are.

I couldn't find anything under $10,000 that didn't have over 100,000 miles. Well, I don't care if it has 160,000 miles. Find them an old Toyota or Honda. I don't care if it's a 1999. Those things will go forever. And Melissa, he needs to be looking too.

Like I'm hearing you as the mom, which I get. But also, he's 21. He's 21. Like he needs to, this is his problem. You know what I mean? Like you guys obviously are there supporting him. But I do want him to be bringing you ideas. And maybe he pays half of the car. And you go, hey, we're going to put in two grand. You're going to put in two grand.

We're going to find you a four thousand dollar car. We're going to negotiate it off Facebook Marketplace. You're going to take it to get it inspected. And I think that will help him see this car differently. OK, OK. Yeah, because I was just looking at dealerships. I mean, no, I would look at your options are going to be Facebook Marketplace, Craigslist, and AutoTrader, and sort by lowest price in your area. Maybe even drive a few miles to go find this car. That's a good deal. And at that price point, too, Melissa, it's amazing what just cash will do.

Go get $5,000 cash, bring it to the house, and say, hey, here's what I got. You may even get a good deal, right? I mean, I know used car prices are insane right now, but still, there's still some ways to get a deal, negotiate all of that. But it would be through more of an individual, not a dealer. I would not go through a dealership. The dealers aren't messing with cars that cheap right now. Yeah.

Oh, yeah. Okay, so my takeaway is you're suggesting if you're in our shoes, not do the claim, get a cheap car and just keep that for a few years and then go from there. Yeah. And I'm going to still stay on that police report. I mean, cars turn up. It's crazy. And it may take a few weeks, but if it's not on the chop shop yet, it may just be sitting somewhere in someone's driveway.

Okay. Without the plates on it. Who knows what they did. But it's amazing how these things turn up. So still keep track of that, but at the same time go, how much are we willing to put in? Have him maybe come in with half of that money and have him start looking and have him make the decision.

Okay. All right, you guys are wonderful. Thank you. Thank you so much. That's a tough situation. Goodness gracious. That is hard. That's insult to injury.

And I'm like, you know, and I guess obviously the insurance agent knows, but I'm like, if your car is stolen, I mean, I guess obviously your insurance goes up. Like, that's one of those things where I'm like, is it your fault? You know what I mean? Because different claims, depending on the situation, are also different. I don't know. I'm not in that world, but it is frightening to think about that someone could just get in your car and take off.

I know. Wild times. Yep. Wow. Well, that puts this hour of The Ramsey Show in the books. Our thanks to Austin, Kelly, Ben, James, Andrew, and, of course, my co-host, Rachel Cruz. And who could forget about you, America? We appreciate you listening in.

We'll be back with you before you know it. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, Ramsey personality, joined today by Rachel Cruz, best-selling author and host of The Rachel Cruz Show. And we are here for you this hour answering your money questions, your life questions. 888-825-5225 is the number to call. If you call and you're nice, Kelly will patch you through,

and we can try to help you take the right next step for your money. Is she the judge, Kelly? She's the judge. She's the holder. She holds the keys. Kelly's the filter. She's the DJ. Do I like you?

Do I not? Kelly's confused. I don't know, Kelly. Do I like you? Do I not? Kelly's confused. I don't know, Kelly. What do you think? Yay or nay? Well, Rusty is kicking us off. He's in Mansfield, Ohio. Rusty, welcome to The Ramsey Show.

Hi. Thanks for having me. Thanks for taking my call. Absolutely. I'm getting ready to graduate college here in May, and I'll be a pharmacist once I pass my boards. I'm 36. My wife's 32. I have a whole bunch of student loan debt, about $342,000 in student loan debt. Whoa. I have about $9,000 in credit cards. We have about $34,000 tied up in cars. And then I have a personal loan from a family member, which kind of includes a house. They put down their house as collateral with a

balloon loan. So we've just been paying the interest to kind of live here. How much is that? The house is only $51,000, but in total with other money I owe her, it's about $97,000, $98,000. So what's the total debt that you owe? $482,000. Oh, Rusty. How are you feeling? Are you okay? Yeah, I'm all right.

I'm more worried than you are. I listened to your show about a year ago, and I felt like I needed to pursue the pretty big shovel because I was almost done with school. So I have a job lined up. I'll start. How much are you going to be making? I'll be making $108,000. And that's, I have a job that'll be seven days on and seven days off. So I plan on picking up another job.

Good, good. Awesome. Yep. Is that your household income or is there more money? I have a job that'll be seven days on and seven days off, so I plan on picking up another job. Good, good. You know, so. Yep, yep. Awesome. Yep, okay. And is that your household income, or is there more money? My wife brings home about $450 a week, so. What is she doing? Well, what does that pan out to?

What do you think she'll make this year? She just started this job a few months ago, so I'm going to say maybe around 30 to 35, somewhere in that range. What is she doing? She's a customer service rep for a company. Is that full-time? Yes. Okay. Do you guys have kids? We do not. That's something else I kind of wanted to throw in there.

We have issues, so we'll probably have to do like an IVF if we want to have kids. So, um, I wasn't sure if, you know, where that would fit in either because we're getting kind of older and it's coming towards that time or not at all. So totally. Wow. So how can we help today? Um, I just, I just kind of need a plan of, I guess, where to start. So the house doesn't have to be refinanced for another three to four years before they call for that balloon loan. So I wasn't sure if I should pay on other stuff for three years or so. Can you get out of this house situation? Yeah. Is it the house that you're living in that has the mortgage and the loan and everything, or is it the family members?

So my mother put her house as collateral for this house because this house is technically worth a little bit more. So it's her house that is on the line, I guess. And how much do you have left? How much is left on the house? Oh, we've just been paying the interest, so guess. And how much do you have left? How much is left on the house? Oh, we've just been paying the interest. So the whole amount. Rusty, you're going to have to get...

How much will it sell for? I honestly don't know. Because here's the deal, Rusty. Y'all are... Say again? We got it in 2017. So it's been a little while. I'm sure it's probably, so it's been a little while. I'm sure it's probably in this market went up a little bit.

Yeah, probably has. So here's the thing, Rusty. You're in kind of an extreme situation with everything going on and the amount of debt, which means in order to make movement, you're going to have to make some extreme moves. And we don't always recommend selling a home and that kind of thing to get out of debt because for some people it's like hey you got twelve thousand dollars of credit card

debt and we're like awesome cut everything and pay it off as fast as possible but you i mean it's a substantial amount almost half a million dollars and so if you want to start making some big moves that's where i'm going to start looking first and foremost it's like where are the places that we can make some drastic moves? And I know you guys want a family in the future, and that's amazing. And we can definitely talk about that later on in this call. But like, you don't have kids right now. Nothing's tying you down to this house.

Like, I would start eliminating stuff. And your cars, you got $34,000 of car debt. How, is that between both cars or is that? Yes. Yeah, that's between both. Between both cars. What are the cars worth? So we owe about a little over $10,000 on one. It's probably worth about $12,000 or $13,000.

And then we owe about $23,700 on the other one, and it's about worth $25,000 or $26,000. Okay. Well, man, if I'm in your shoes, I'm feeling a sense of urgency, and I'm going, we are selling these cars tomorrow and we're going to drive beater cars we are selling this house next month and we are going to live somewhere that we can afford in a one bedroom and we're going to clean this up I mean like I mean I'm talking yes making these extreme emergency situation and the nine thousand dollar credit card debt all of it so like Rusty yes what George is saying and I totally

agree with like there needs to be this sense of, in order to make a dent in half a million dollars of debt, we got to just make some moves. And so that's right, selling the car, selling the house, and then mapping out a game plan. So you're going to make 108k a year, but then that's every other week. So finding a job ASAP of what you can do every other week, your wife's making 35,000 in this market. Honestly, I think she can make more. I would be looking for a different job. Like I would be upping, I would be making huge lifestyle changes because when you do that, what's going to end up happening is you're going to, you're going to have all this other margin to throw at the debt. You're not going to, you guys are going to be living on nothing. Everything's

going to be going towards that because if you're not making these types of decisions, you're going to be in this for a really long time. And your pattern so far, Rusty, not to shame you, but your pattern so far of the decisions you guys have made with the credit card debt, the car loans, your mom taking out collateral on her house with a balloon mortgage, your whole mindset has to shift. You have to have this realization, what we've done has not worked. So we're actually gonna have to do the opposite of everything I thought I was going to do with money. And so you and your wife together, like making this, because what I would do too is, and sorry, George, you can jump in, but like, it's having your why, what's your why? And for you guys to

start a family and yes, and I, and we've had close dear friends go through this process. Multiple friends go through the IVF process. And it's long. It's exhausting. It's strenuous. I mean, there's all that emotion. And then obviously the prayer of being able to have a family on the other side of that. I want that to be your why.

Like sacrificing so majorly to say over here is what we want our lives to be. In order to do that so well, as stress-free as possible, with as much money in the bank, these are the decisions we have to make. Yeah, and make sure you're cash-flowing that IVF treatment. Don't go into debt for it, which means we got to clean this thing up and use that why. Listen, your life at this rate

is going to suck for 10 to 20 years. I don't want that for you. I want it to suck for two years because you got gazelle intense, you sacrificed, you did everything you could for your family, for that future kid. That's what I want for you, Rusty. I'm going to gift you one year of Ramsey Plus.

I want you and your wife to go through all the Financial Peace University videos, get a game plan, get on the every dollar budget, and start attacking this thing with a vengeance because your life depends on it. This is The Ramsey Show. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union

because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you 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.org slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Our Ramsey Show question of the day is brought to you by YRefi. Student loan debt is a swamp thousands of people find it hard to escape from.Refi. Student loan debt is a swamp thousands of people find it hard to escape from. So don't be another statistic in the student loan swamp. For distressed private student loans, there's YRefi. We trust YRefi because they help you with a low fixed interest rate you couldn't get anywhere else to help you stick to your budget and get out of debt.

Learn more at YRefi.com slash Ramsey. That's the letter Y. R-E-F-Y.com slash Ram million. 100 millionaire by the time I... I didn't know that was a term. I wasn't sure either. I was just wondering because I discovered you guys on TikTok. Look at us, George. And I thought to myself that y'all had good information and I just wanted to know if it's possible. Thank you for your time. Wow.

I'm doing the math for our friend Nathan here, Rachel. It's not looking good. $100 million. Do you want to know what it takes, Rachel? I actually would love to know. Okay, it takes, get this, you would have to invest from the age of 14 to the age of 30, and we're going to assume a 10% rate of return. Sure.

Okay? Yeah. From 14 to 30, you would have to invest every single month $220,000. So there's the true answer, Nathan. nathan but because now your hope has been stolen from us let me give you some do a millionaire do one million one million to get to a million okay well that's so that would be that would be what did you say to it two thousand a month at that point 220 grand was for a hundred million yeah so if we take it down to $20 grand, that's $10 million. That's pretty good. I'm going to go $5 grand a month

would get you to $2. So $2 million. Just about $2,000. Yeah, just about $2,200 a month. Okay, all right. From $14 to $30. Okay, all right. That's still a lot of money

for a 14-year-old to be socking away. We've at least got a bullseye we can look for. Okay, so Nathan, I would encourage you 14 year old to be socking away we're at least got a bullseye we can look for um okay so nathan i would encourage you um to get beyond this like label of quote-unquote millionaire because i think a lot of people believe if i just had this amount of money whether it's 1 million or 100 million yeah everything's gonna just be fine and i'm gonna be okay um and the truth is financially numbers wise there's a good chance, yeah, that's really going to help you. But your money habits are going to be a big

part of this. And who you are as a person, Nathan, is going to have a big part of this. Because there are people, I would say, that have millions and millions and are still very discontent people. And they're still running this race, acquiring, trying to find some level of joy and peace in life, and they're not finding it through money because money does not bring that. It can bring stability. It can bring you the ability to do things with your life that is fun and have experiences. That is all true. But there is, I would say, a bigger character question there of why do you want to have this millionaire status and to go ahead and bust the bubble that just because you reach that does not mean that life

is suddenly going to be perfect for you. I feel like that's the myth out there, you know? Oh, yeah. Well, if I can just do this and by 30, you know, there's like kind of that whole, the fire movement and it's like, I'm not going to do anything with my life. If this doesn't happen by this age, then my life is over and I've failed. It's insane. So I just, I rebuke all of the get rich quick, even if it's with decent intentions and you want to do it the less risky way. There's just no good reason that any human needs to make hundreds of millions or even I need to have a million by this age. And the truth is,

Nathan, if you follow the Ramsey baby steps, you're going to get there by 30. Your net worth will be a million dollars or more just by staying out of debt, stacking up cash, buying a home, getting the house paid off, investing 15% of your income. Over time, compound growth is going to take over and do the heavy lifting for you. So that's the not fun answer. But I do think we need a new book from Dave called called baby steps 100 millionaires looked it up it's called sent to millionaires the centi million that's right oh so it is a thing sent time millionaires you have 100 million more i am not cool i i wasn't your words not mine that's all i'm saying but thank you for the you know nathan it was a good brain

exercise even if it wasn't a pretty wild question to ask. Good for you, Nathan. But the fact that a 14-year-old thinking that way, he's going to be the world changer out there. Sure. Because it's going to take being an entrepreneur to make that kind of money or even close. Yeah.

You know, you're not going to make that as a W-2 employee likely. But I wish you the best. Maybe Nathan will be calling in at 30 being like, hey, just so you guys know, I have $100 million. Wait, what was it called again? A centi-millionaire. You know, Al Tremosi, you know, the super beefcake dude, we've had him on the show. And he's a centi-millionaire.

And he's an entrepreneur. That's how he did it. That's great. And he's about my age. So call me a failure. Many do. Many do. You're still working, George.

I'm here. I'm doing it. I just do it because I love it, Rachel. I haven't had to work in years. I'm here. I'm doing it. I just do it because I love it, Rachel. I haven't had to work in years. I'm kidding. All right, let's go to the phones. Einar is in Oslo, Norway.

We're going international. Whoa! We're going overseas. Here we go. What's going on, Einar? Hi, guys. It's such an honor to talk to both of you. I'm great. What time is it there? Right now it's 24 past 9 p.m.

Wow. All right. Thanks for staying up with us. Appreciate it. Thanks for the call. Yes. What's your question? Thank you.

Okay. My question is how do my wife and I decide the amount and the amount of our personal items in the budget? So I'm a firm believer that equal isn't always necessarily fair because, for instance, a haircut for her is much more expensive than mine. Unless you're George Campbell. It is the opposite in the Camel household. But yes, it's a good point.

Yes, and you two are the perfect couple to answer this with a woman, a man, and a spender as favors. Okay. Yeah. Yeah, I think that the amounts totally could be different. And I'll be honest, Winston and I,

well, I think we may budget the same amount, but I spend mine every month and Winston probably rarely blows through his fun yeah he may I don't even yeah so um we probably technically could budget less for him and he would be I mean but it's yours equal in the budget yeah I was gonna say it is equal in the budget I'm you're making me question why do we that? Why do we not just correct it to what's reality in the crew's household? I'm not sure. Because I don't think Winston would care if you lowered his amount. No. And if Winston wanted to buy something, like, yeah.

That's how it goes. We're going to figure that out. Once a year, Winston goes, I want to buy this. And he just does it. Yeah. He spends all of his money. Whereas Rachel's like, ooh, how much fun money do I have this month? Yeah, so I would agree.

I do not think that it has to be equal. And I say that cautiously hearing people that are listening or watching us now that are not in your position because you're saying that yours would be lower than hers, correct? Correct. Yes, so I think that is totally fine. But I don't want some crazy spouse out there listening and being like, oh, my my gosh mine gets to be higher and you should lower yours yeah like like yeah like i heard on the show they said the husbands should be low yeah yeah yeah so i don't want to like create you know conflict between married couples out there but if the reality is is that you are naturally a saver and you're not going to spend as much as she spends um then yeah i think it's reality should reflect the budget. So I would for sure and not feel bad about that.

Because you're right. I mean, as technically speaking, women, I think, do spend more. George is the exception here. You got the right co-host. But here's the other thing. I don't have any hobbies. Except for your dogs and your hair. Exactly.

And coffee. And coffee. But I don't go crazy there. Do you spend more than Whitney, though, a month? I wouldn't say in fun money. Because again, I don't go crazy there. Do you spend more than Whitney, though, a month? I wouldn't say in fun money, because, again, I don't have fun. I went to a movie last night, and I was like, wow, I'm really living. That's it. So, Einar, can you give us a number here?

I don't know, what's the currency in Norway? Is it a kroner? Krone? Yes, correct. But to keep it simple, we can just divide the total amount in Norwegian kroner by 10, and we got the dollar amount. Okay. We bring in around 6,000 a month, and for next month, we set up actually equal, so 200 each.

But last month, we set up 454 and 200. And it worked out? Yeah, sure, it worked out. But she feels kind of guilty sometimes. See, that's something we can deal with outside of this, but it has nothing to do with the budget. It's just she feels like it should be more equal and she feels bad spending,

but the budget is permission to spend. It is, and it should be a reflection of reality, and the reality is what she spends per month is going to be more than yours, and that's totally okay. Regardless of who brings in the money, put it all together, and you say, what is our reality of our life? And that's how we're going to budget. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have,

George. Sketchy and never trust them. And that's why we recommend Delete Me. They help with that. Yeah, they do. Delete Me actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find. That's right. And then once they remove your information, then they're going to

send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteeme.com slash Ram Ramsey that comes up to less than nine bucks a month. Super affordable. It's amazing. So again, that's join delete me.com slash Ramsey. Make sure to

check it out. You guys. Welcome back to the Ramsey show. We are taking your calls and up next we have Seth in New Orleans. Hey Seth, welcome to the show. Hey, thanks for having me. Absolutely. How can we help? Well, I mean, not to be too long with it, but 2018 rolled around and Dave came out to a church nearby my house and went and listened to him talk. And, you know, I've been broke and working hard and uh decided that i'd follow him and be working hard not broke and uh over the last couple years i've worked real hard and put a lot of you know seeds in the ground and this holiday had some of my family over and i have new property and some new space and they wound up up, you know, asking about the mortgage. We're working on some land and asked about the mortgage.

And, you know, I just kind of said, I don't have mortgage on the property. And then, you know, one thing came to another. And it came out that we had a lot more money than my family had ever thought you could have. And it's caused quite a bit of quite a bit of a hum dig around uh the the family so so have they asked you for money or are they just upset and envious that you don't have debt and you're not strapped with payments oh yeah no all yes all of it so they straight up said hey you're doing pretty well boy aren't you you got any of that money laying around for us? Like, was it joking or was it pretty serious? No, I mean, we went out for a mess of kids, you know,

and so we went out one night for something and the ice cream was there. And I was like, you know, you told my kids grab ice cream, whatever. Kids grab ice cream. Well, I ended up getting ice cream forever, which isn't a big thing anymore. And, you know, we're like, oh, it must be nice. You know, and then the next night they were saying, you know, we're going out to dinner. My wife was like, oh, we only went to dinner. Our family was over.

So we were like, oh, just the two of us will go out. And they were like, oh, you got us. You can go too. But no, I do not. I do not have you. So there's assumptions and entitlement now of like, well, he'll cover it because he's doing pretty well, so he should cover it. And is this your direct parents?

Like who's involved here everyone yeah no everyone asked throughout the course of the two weeks after that you know they found out about aunts uncles cousins different yes sir all the phone calls and everything goodness gracious it's like you won the lottery or something but it's taking you how much money do you guys actually have? A lot. I mean, I don't know what a lot for everyone is. A lot for what I thought.

My wife and I picked up. We stopped whining and started working, which is kind of our joke to us. I don't know. We put some things together, and right now I think we did our net worth at the beginning of the year, and it was right under $4 million. Oh, my goodness.

That's great. That is amazing. How old are you two? Yeah. I'm 37. We're 37. That's incredible. And this is mostly your family, not hers?

No, her family doesn't know. You're like, they're not going to. We're not telling anybody else. After this debacle. Yeah, they're good, though. They're all square. They're not my side. They'll be like, oh're not going to. We're not telling anybody else. After this debacle. They're good, though. They're all square. They're not my side. They'll be like, oh, good for you. Is your family local, Seth? Do you guys have

day-to-day interaction with them? Not so much right now, but yes, ma'am. Okay, but they're local, and you guys usually would kind of do life together. You do dinners together. They're a part of your rhythm in life. Yes, ma'am.

Okay. Hmm, Seth. It's about to get uncomfortable. How do you feel? Are you like pissed about it or are you confused with it? Do you feel bad? Like what's your overall emotion? Well, I was upset the first night,

and so I ended up calling everyone together the next night, and I was like, listen, my responsibility is to take care of my wife and my kids and i'm gonna do that and i i told them i would put them through fpu you know and i wrote a list of all the books i read i mean i picked up majority all the books and uh library's free you know and so i was like i'll tell you all the books all right you can read those you know i'll tell you what i did or they're not interested in learning well that's pretty bold set yeah i and so i was like i'll tell you all the books are you can read those you know i'll tell you what i did or they're not interested in learning well no it's pretty bold set yeah i'm proud i was expecting us to have like a conversation about setting a boundary you just did it the day after so then how do they respond to that they asked for for you to pay for their dinner i think

yeah yeah pretty much you know and they're like well if you don't have it or you don't want to share you know and it it was just a lot of guilt and so i've been wrestling with it for a couple months now and i was listening to y'all show and i was like you know i should probably just call and say hey y'all i mean you guys have money i don't have a lot of people in my life to have money so you know i have new friends i guess but it's hard to say you don't you bother looking at you hey i know you got ten thousand dollars for a business like i don't have ten thousand dollars for your I'm sorry. That's not what I have. Yeah, this is not Bank of Seth. But I'm not there. That's right. Well, you've approached this with a lot of tact and wisdom

and maturity, which I applaud you for. And the fact that you're even willing to have the hard conversation tells me that there is hope here. But it may take a few of these conversations and enough times to where they get the hint. And you know what? That might hurt these relationships. These people may not want to hang out and go to dinner because they have some own resentment that they, you know, some poison they've been drinking. Yeah. And so I don't want that to be a reflection on you.

And it's going to be painful in some of these situations. But you have to do what's right for your family. And you can't let this generosity turn into requirement because that takes all of the joy out of it. Yeah. And Seth, and you've, and just so you know, and I know you probably know this, but just to say it out loud, like you've done nothing wrong. Right. And I feel like what can happen is they can pin you in a corner where you feel

like suddenly if you don't do something, you're doing something wrong because, yeah, do you have the means? Yeah, you guys do. But you're an adult and you get to decide what you do, just like what you told them. What you, your responsibility is to you and your family. And what you do beyond that is up to you. But by you existing with this money, that is not a wrong, you're not, you're not in the wrong. And I feel like sometimes you can feel like, oh my gosh, I'm the one that's done something that's not good or not okay. And so just remember that, that you haven't done anything wrong. And the truth is, and George said it, but it probably sadly will create a divide. And I wish that wasn't

the case, but I feel like they've proven themselves. After you set a pretty strong boundary and were very honest and clear. They chose to overstep that boundary and asked you to pay for dinner that night. So I think you have to have a realization, too. And you probably already have. But you and your wife stick together as a team and just realize, oh, my gosh, sadly, they don't have the maturity to handle this part of your life that you brought them into. Right. By sharing this information. And that's sad because it may end up causing a divide and stronger boundaries that you're going to have to set. Yeah.

No, I agree. The thing that I kept pushing for was they could do it too. You know, that was what was hard in my heart was, and I'm not trying to withhold from them. I'm trying to, you know, I'll walk with you. I'll tell you exactly how I did it. I wrote it all down. You know, I'll keep my budgets in paper. You know, I can tell you how I did it. And yeah, there's a lot of luck and a lot of things, but you know, we could do it together. Like I'll help you, you know, and they and they're just no i'm not interested in working i mean they used to make fun of me in the beginning when i said oh yeah i was gonna follow dave ramsey playing they're like no don't don't do that you know that's not gonna make any money all right i mean he seems like his wife and his wife i don't want to do that too you know yeah and that was my heart i was like they're not interested in learning

entitlement runs far away from work that's generally how it goes and so i love the old quote i think it's a maya angelou. When someone shows you who they are, believe them the first time. And if they show their character that this relationship is based on transactions and your forced generosity, then it's not a relationship. And they're choosing to opt out of that relationship if that's how they see you. And so the hardest part about all this is you grappling with the emotions of that has nothing to do with them. It's you feeling like I'm not the bad guy here. Cause they're going to gaslight you and go, man,

you're evil. I can't believe that you're so, you're so stingy after everything we did for you. Remember when you were five and I took you, there's going to be all kinds of things that bubble to the surface now. Yeah. That's what I pretty much would nail what my dad said. Yeah. A hundred percent. Hit him right on the head dang yeah man it's an odd conversation it's an odd place to be but

you know i i don't know i was thinking that maybe maybe the best course would be you know bend the knee a little bit and just best course is uh i don't flee the country and change your name but let's not do that you know yeah the right course is have the country and change your name, but let's not do that, you know? Go into the witness protection program. Yeah, the right course is have the hard conversations as many times as you need to, and then you need to draw the line and say, listen, we've talked about this several times. This is where I stand on it. I love you guys, but our relationship can't be based on transactions. Yeah, and again, they're choosing this.

Like, you haven't done anything. You've just done the hard work for five, six years. Seth is a good man. I know. And this is what is being exposed in them. And you can't control them as much as your heart is so good and pure and wanting that. You can't.

And I think it's going to be, it's going to continue to create that divide. And you're going to continue not to want to let them into your life, which is so sad with family. So I'm so sorry, Seth. I hope you feel encouraged, though. You're doing good. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Rachel Cruz. Open phones at 888-825-5225. You call in. We'll help you take the right next step for your life and your money. Dan is up next in Chicago. How can we help, Dan? Yeah, I'm a pastor, and most of my ministry I've lived in a home that has been provided by the

church. And I'm getting ready to retire, and my wife and I kind of feel like we need to buy a modest home in order to, you know, perhaps gain a little bit of equity and protect us from, you know, rising rents and things like that. That's wise. I'm sorry? That is wise. I like that, man. Why?

No, it's why. Sorry. There is wisdom in that, man. I like that. Okay, so you want to buy a house when you retire next year yeah how much money do you guys have well we we're going to have about two thousand dollars a month after the medicare deduction in social security we've got about three hundred fifty thousand dollars in a 403B account, and we've got $50,000 cash. We don't have any debt. Just didn't know what the right move for us would be. Is it better for us to go ahead and

spend the money on rent, or is it better for us to try to find a home that's within our price range and then take on a mortgage? Well, I'll give you the good news and bad news. The great news is you're going to retire with no debt and an emergency fund. The bad news is you don't have much money to put into a house as a down payment to be able to afford the mortgage because you said your income is going to be fixed at $2,000 a month in retirement? Yeah, plus whatever we withdraw out of our 403B. And the 403B at $350, I mean, it's not a massive nest egg that's going to last us, you know, 30 years.

And so how much money can you guys save in the meantime to get a down payment while you still are working? Well, we're saving right now about $1,300 a month. Okay. And I'm planning on working, you know, another 10 or 12 months. Yes, that'll be close to $15,000. Yeah, I mean, have you looked at homes? I know it says Chicago on the board where you're from. I guess a suburb of Chicago.

Have you looked at homes and what they're costing? Yeah, we're really in a small town about west of Chicago, and we feel like we can get a more than adequate home for us for, oh, you know, in the $140,000, $150,000 range. Okay. Yep. I would sit down tonight and, you know, pull up the mortgage calculator and say, hey, if we put, let's say, 50 down into a house, we had $100,000 mortgage, what would that be monthly? Because my concern is if you're living off of 2K and you're probably not going to be able to pull a ton off of that 403B while it's sitting at this stage at 350, because you would decimate it. If you took out 150 from that 403B,

I mean, that's a large part of your nest egg that you've unplugged from future compound growth. And so I would sit down to see, does it make sense to rent? Can we rent for, you know, 750 in our area versus the mortgage being 1200 bucks? That's the kind of math I'd be doing to see how can we live off of this income? Because it's not a lot of income to live off of just considering the two grand plus a little bit from the 403b. Yeah. Yeah. Okay. But you wouldn't say it'd rent long-term, though, George.

No, long-term, I'd rather have you in a house. Yeah. But right now, it's just, there's not a ton of money to throw into the house and just purchase it with cash without just using up all of your retirement. No, yeah, and you may not have to purchase it in cash. He could put down payments. You put 50 down, took a $100,000 mortgage. Yep, yep. I doubt the payment would be astronomically high. But again, if you're making $2,000 and the payment's $1,000, that's

a lot of your world just eaten up by the mortgage. Yeah. Well, I didn't know what my options were. Could you work longer? Could you do an extra year? Well, I could, yeah. I'm not under any pressure to retire or anything like that. I might just, just to give you guys a little more wiggle room, allow your nest egg to grow, allow you to get more cash for the down payment. That would give me some more peace personally. Because you guys could get close to, I mean,

if you guys saved for the next two years, let's say, you could save up to $30,000 in just that cash flow that you're living off of, plus the $50,flow that you're living off of. Plus the 50 that you have, that gets you close to 50% of a 140 mortgage. You know what I mean? So like your math is, it can compound pretty quick if you do work maybe one more year. Yeah.

And if I were you in your shoes, and I would sit down with a financial advisor who can kind of crunch these numbers for you, but I wouldn't be comfortable taking out more than a thousand,000 or $1,500 a month out of that 403B because you guys might have another 30 years ahead of you that you need to live off of this. Right. And so that's where the numbers come in. Yeah, how much are your expenses a month, Dan, for you guys?

How much do you guys spend a month? Well, right now, probably about, I don't know, $28,000 to $3,000, something like that. Okay. So, yeah. So, I think what George was saying, that $3,000. And that's without paying rent. That's right. That's right.

So, then, yeah, that's $4,000. Let's pretend that the mortgage was $1,000. So, that means you'll need $4,000 a month. And so, you get the $2,000 that you were saying comes in from social security and everything and making sure that you can withdraw again that we're just speaking on you know round numbers here napkin math would say you know taking out 2,000 out of that nest egg every single month you'd probably run out of money while your expenses may be going up later in life so that's my concern i don't want you guys to be down to the wire every single year.

That's not the kind of retirement I want to have. And so that's where we were saying pause, work longer, keep stashing away in that nest egg, stash money away for the down payment, and then see where you're at a year or two from now. Okay. All right. Well, I appreciate your advice. Yeah, I hope that helps, Dan. Wishing you the best in retirement.

For sure. And that's a common issue that we hear with people that do ministry and housing is provided. It's like, oh my gosh, that's great. I don't have to pay for rent or a mortgage. And then you get to Dan's age, a retirement age, and there hasn't been any intentional saving towards a house. Yeah. And then you're kind of stuck. So if you're in that spot, here's what I would do if I was in your shoes. Whatever you would be paying market rent, I would take that amount and put it away in an investment account for as long as you have that career. So that when you do retire, you go,

oh my gosh, we have 400 grand just allocated for housing. For a house. To go buy a place in cash. And always remember that your housing line item in your budget is usually number one, the most expensive and number two the most volatile because rent especially will always be going up that's what we've experienced right over the last few years like it continues to go up it rarely if it never goes down and so 20 years from now dan's rent might be four grand exactly so if you like just say well i'm never going to buy a house i'm going to just be a renter for the rest of my life well that's one expense in your budget that's very expensive and will continue to go up variable versus saying i'm never going to buy a house i'm going to just be a renter for the rest of my life well that's one expense in your budget that's very expensive and will continue to go up variable

versus saying i'm going to buy a home and i'm going to work to pay it off that's why it's baby step six we actually met somebody uh at the break george she just paid off her house on tuesday and someone else that paid off their house that was here for their 40th birthday in a row two houses in a row that were um people paid at very young ages yes and so that's the beauty is that line item again is is out of the budget so retirement. Yes. And so that's the beauty is that line item, again, is out of the budget. So retirement has a lot more flexibility. That's right.

When you get that house paid off going into retirement. So that's the goal. Rachel, we've got a really fun little assessment on the website right now that helps people figure out if they're staying on track with the baby steps. So you can take a quick quiz to check your progress and receive a personalized plan just for you. So here's how you get the Get Started assessment.

Go to the show notes of this episode, the description, click on the link titled, Are You On Track With The Baby Steps? And you can complete the quiz. Yeah, and this is always helpful because especially if you're new to the show, a lot of people find us on podcast or YouTube and have been listening just a little bit.

You know, to know kind of where you stack up against other people, you know, other people, other Americans, but also against the plan just to kind of know where, where am I? Like, how do I even start this process? It helps you really kind of get a baseline for it. I think that's always helpful if you're, you know, money's an area for some people, they don't really think about it. They don't really, yeah. You're doing 17 things at once. That's right, yes. So to get actually a concrete idea of, okay, this is exactly the next thing I need to be doing,

it's a great tool, so make sure to check it out. Can I tell you one of my secret gear grinders? Oh, I can't wait. When people say, so Rachel, we've been doing the baby steps just out of order. And I go, well, then you're not doing the baby steps. If you're investing and trying to pay off debt and saving and you bought a well then you're not doing the baby steps if you're investing and trying to pay off debt and saving and you bought a house while you're in debt i'm like you don't say you're doing the baby steps out of order just tell me you're not doing the baby steps

so you're investing in just a personal little grudge there george you just feel that you know it's rare that i'm bothered by something i'm kidding well george is not uptight at all no worries not tightly wung high standards maybe we're gonna unwind them well enjoy this friday I'm kidding. George is not uptight at all. No worries. I don't call it uptight. Not tightly wung. High standards, maybe. We're going to unwind him. Enjoy this Friday. We'll do that after this hour is over. For all of you listening to the show on YouTube or podcast, it is about to end.

But you can listen to the rest of the show. We've got more to come over on the Ramsey Network app. You can finish the show in a distraction-free experience. So go check out the Ramsey Network app in the App Store. Completely free. And you can catch a whole other hour of this. So go check out the Ramsey Network app in the App Store, completely free, and you can catch a whole nother hour of this. So don't miss it. Click the link in the show notes or go watch the rest of the show in the app for free. We'll see you over there. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show,

where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by best-selling author and host of The Rachel Cruz Show, Rachel Cruz. And this is your show, America, so give us a call at 888-825-5225. You jump in, we'll talk about your life and your money, and we will tell you the truth, even if it hurts your feelings, because we love you that much. And we appreciate all of you tuning in today. Becky is in Bristol, Virginia to kick us off. Becky, welcome to The Ramsey Show.

Thank you for taking my call. Sure. How can we help? Well, I am currently $85,000 in debt that my husband of 35 years does not know about. And I have just had my oh crap moment when I overdrew my checking account because 20 years ago we had to file bankruptcy. And at that point, my husband and I separated our checking accounts because he is a saver and I am a spender and I got to spend to that mess. So now I am door dashing. I'm working my full time job. I'm selling everything that I have purchased, trying to get out of this debt because I do not want to tell him and I don't want to ask him to help me. And I can't find, and DoorDash,

where I live, is not that popular because it's just a rural area. So. How much do you make? I make $38,000 a year. Becky, what's the $85,000? What kind of debt is it? Credit. It's all credit cards. Wow. And what are you, what are you buying? Like what, what, what's, what's on the bills? I was buying anything and everything I wanted. If my kids wanted something, which they're now grown,

I would buy them something. I would, if my mom needed help, I'd just give her a credit card. Hmm. Okay. What made you wake up today and go, I'm done with this?

Uh, when I overdrew my checking account account paying these minimum payments on these credit cards. And are you paying any other bills right now? How are your finances going with your husband if everything's separate? Our house is paid for, thankfully, because of him. And I pay my own car payment and cell phone bill. What's your car worth and what do you owe on it?

I owe $15,000 on it and it's worth about $10,000. And was that one of the things you were planning on selling? I don't see how I could because I don't have the $5,000 to make up the difference. Is the $15,000 wrapped up

in that $85,000 you mentioned? Or is that outside of that? No. No. No. My husband knows about the car payment. So you've got $100,000 in debt? Yeah.

Anything else? No. Okay. Okay. So, Becky, you do realize you're going to have to tell him. I don't want to, but... You think you're going to go to the grave and he doesn't know this ever happened? Well, I would do just about anything to stop it because, like I said,

I got us in a really bad situation 20 years ago, and he's not this type of person. He's not a spender. He's a saver. He paid our house off early. I just can't imagine having a healthy marriage going forward while you keep this secret. You can't. Yeah. I mean, you're not your marriage will not be where it could be ever with secrets. Right. And that's financial or otherwise, because there's a part of you, Becky, when you hold those kind of secrets and you're trying to be the one to fix it all on your own, which I'm not saying you shouldn't. I mean, like we can get to that discussion in a little bit, but that's going to come out other ways, like within your body. I mean, like you can't, people, humans, our souls, we can't carry that around. It will come out sideways one way or the other. And so coming clean for you, Becky, and not even just for him to have the knowledge, for you. It will eat you alive.

For you, you can't carry this secret around. It has to be taken from the darkness inside of you to the light. And it is going to be an excruciating conversation. But I think for any way for you to move forward, not just financially, but in other areas of your life, Becky, you have to bring him into this and or someone else. If you have a good friend who knows you both well, maybe even going to a third party first

and having them sit in with you if it's too difficult because of your history. But whatever that looks like, I mean, I really would encourage you. You have to tell somebody and then eventually you have to tell him and have this conversation and, and Becky, and I want you to do some good work too. I'm like, you know, we'll get you some John Deloney, Dr. John Deloney material too, because there's some real stuff going on, Becky. Like I know, like when you look at those numbers on your screen and you realize, holy crap, I can't even keep up the minimum payments with what I'm doing. That's your old crap moment. But there's a lot of

other stuff, Becky, going on that caused this. I don't know if there's a level of a shopping addiction. I don't know if it's really poor boundaries that you've set with people, a sense of not living in reality. There's all these elements that I want you as a person to overcome because money's just the symptom. This $85,000 in credit card debt is a symptom of other things going on within you. And until that's fixed and until that's addressed, really with a good counselor and a therapist, are you going to heal from that, be aware of that, and be able to make different decisions day in and day out? And I wish there was an easy

button. I wish there was an easy button, but it's going to be a season for you guys, a season of financially paying this back, whatever that looks like, and however you guys decide within your marriage. But it's also going to be a season of rebuilding trust because trust will be broken. It's been broken. And hard conversations, I mean, it it's gonna be it's gonna be painful but it is the way to healing becky that is the way to heal it is not to hold this and try to fix it yourself okay i'm so i'm so sorry i'm so sorry you're you're in this and i know there's probably so much shame and guilt and regret that you have. But moving forward for you to be able to take that weight off, healing has to happen.

And it can't happen on your own. It really can't. We have to have other people around us and I think good professionals as well. And long term, we have to get your husband back to husband mode instead of roommate mode. One of the best parts of marriage and one of the hardest parts is having the accountability of a spouse. And I think that could have helped a lot of this if there was transparency in the finances and him saying, hey, you need to cut up that card. Remember, we don't use that anymore. We got burnt. We went through bankruptcy 20 years ago. We don't want that to happen again.

And so I think you need accountability right now. It may not be your husband because there's already a lack of trust there. But we need accountability from other people. You've been doing this alone and keeping this secret. And how old are you? I'm 50. You're 50. So you have a lot of years left, Becky.

I'm like, you have a whole second part of life. We've seen bigger Yes to be lived and I we want that for you and more and and I want that for you more than just the money Side, I want this fix for you. But becky i'm like Man, there's there's so much for you To heal from and your story what brought you here? um and I really want you to be able to do that if If you hold on the line, Christian's going to pick up and we'll give you a bunch of Dr. John Deloney's books

and different materials. Because I think walking through that and kind of opening the door to that part of the world and understanding yourself, I think is big. And Christian, put my book, Know Yourself, Know Your Money in there as well. But we just want to get you some good resources, Becky, and push into this. Don't sweep it under the rug. Don't try to fix it

yourself. Do the hard work. It's hard, but that's where the healing is. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Rachel Cruz this hour. This is a show for you, about you, and the number to call is 888-825-5225. Now, as I mentioned, I'm co-hosting with my friend Rachel Cruz. And we also co-host Smart Money Happy Hour, which is one of the hottest shows on the Ramsey Network. It's people's favorite. I'll just say that. Why do you think that is?

Here's my theory. Okay. I think people want a lighthearted, casual conversation, easy listening where they can laugh, and then they accidentally learn something. Oh, that's good. That's the way I see it. Yeah, yeah, yeah, yeah.

It's like you're kind of eavesdropping in a conversation with friends. You're part of the happy hour. I don't know if you wish that we were your friends. That would be ideal. Rachel, obviously. That's been Rachel's vibe. I want to be your friend let's just say that i'm not accepting applications for new friends right now i have a newborn rachel priorities but one of our episodes that we did that became one of our highest ones 113 000 views and this is what it was called explaining our most hated financial

advice and for some reason people really the haters showed up as well as the fans. Yes, so we're gonna go through that. People do not like us sometimes and we're gonna talk about it. It was also cathartic for me. Can I be honest? It felt good. To just like have my rebuttals.

Oh, yeah. My retorts. Yeah, my retorts. Okay. You got that first one, George. This is very you. Thank you. I don't know if that's a compliment, but I'll take it. The first one we say is crypto is a terrible way to invest and spend your money. We say it in all the crypto. I'm going to say dudes. It's not a lot.

I just don't feel like a lot of the women. I haven't ran into a lot of women. A lot of women don't get mad at the way the guys do. The guys are like, nah. Women use something called logic a lot. Whereas guys are like, it's like a flex. It's like, come on, man. Yeah. Crypto. Now, you know, women have girl math, and so they're not innocent here. That's true.

We can justify some spinning. Crypto, from the very beginning, I was just like scratching my head about crypto, and I thought, well, maybe I'm not dumb enough to understand. And the more I looked into it, the stupider it got. And now on the other side of it, we kind of all know it was a farce. It's just not good. And the reason is, I'll give you a real reason. Crypto is not based in anything. It's just based on hype. When you even buy a single share of a company, you're hoping that the company produces more profit and revenue.

Whereas crypto is just, I made a coin. This is the coolest, hottest coin. Come get my coin. And so it's very multi-level marketing vibes. And so I always joke that crypto is just Mary Kay for young men for that reason. Which, no offense to the Mary Kay ladies, okay? There are some, yeah, diehard Mary Kay ladies. They're out there. So that's that. The second thing people just, eh, they don't care for us on. You shouldn't use credit cards.

Ooh. We talk about this a lot. That one increasingly is controversial. Yeah, and people, you know, it's because the points and the airline miles, what they get from it, they claim is worth it. But when you sit in our seat, we talk to so many people

where credit cards are not a blessing. It's not a thing that has helped people. It's actually gotten people into a lot of trouble and they end up being in a financial position where the credit card company is winning and they're not winning. And we want you to win. And then you can go through all the, you know, the amount of stuff that doesn't work when it comes to the points and the airline miles playing the game. You can go through the moral side door of, they get to, you get these points and you get this cash back

and you get the airline miles and everything because other people are not paying off their cards. Banks make their money off of interest. And so they're making all this money off of people that are struggling and then, you know, reaping the benefits. So it's like, it's just a gross, it's a gross thing all the way around to me.

And I'm like, if you have a debit card like just pay for everything in the present and then go pay for your southwest flight like just save up budget and save up it's so much more free and statistically what you save by not paying on a credit card in turn could actually help you have hundreds of dollars throughout the year to spend on an airline ticket that you pay for and i'm gonna going to call out all the Ramsey fans who, they're what we call ish, where they go, I did everything, but I still have my credit card. I pay it off every month, Rachel, so I'm fine. And I've convinced a whole bunch of people to try a 30-day credit card challenge where they just put it in a block of ice and we're starting to get the results. And there was an interesting,

someone just said this. I thought it was interesting. They said, a few months ago, I decided to ditch the Apple card and just use the money I have. I just wanted to try it out. They said, I've definitely seen a noticeable reduction in my spending and I've created more margin in my budget for savings. And they said, it's just the little things. There's something about checking my balance, seeing it instantly go down after a purchase that really worked to optimize my spending. I go out to lunch less. I buy less extra stuff at the grocery store. You just make more intentional decisions.

When it's your money and you feel it. Even if that's you, you're the perfect spender, as I call them. You're still spending more than you would have. It's true. All right, next. Next, save $1,000 emergency funds. People are like, inflation, 2023. This is the same advice you all gave in 1993.

Shouldn't it change with expenses being higher and things being more expensive? That's a big one. And funny enough, when Dave came up with this principle, Baby Step 1, 30 years ago, $1,000 wasn't enough back then to get the new HVAC system and cover the big life emergencies. And so the principle of it is it's meant to be a starter emergency fund. Dave started this because people were trying to get out of debt, but they'd have these little ankle biters that would knock them back and knock them back. And so the goal is to cover the ankle biters. If you have a big emergency, number one, we want you to have good

insurance in place to cover some of that, the health stuff. And number two, you pause the baby steps, you save up fast, sell stuff, whatever you need to do to cover the expense. Most of these emergencies are not the money's due today or else the house is getting foreclosed on. Right. That's right. That's right. Yeah. So yeah, the thousand dollars, it's meant to be a quick step to 30 days or less because we want you to get traction. And so much of personal finances is behavior change. And for some people, they can't even cover a $400 emergency in cash. Yeah. Four out of 10 people have zero in savings that's right so we found so even a thousand dollars may feel like an uphill battle but when you do it quickly and you have it and you can move on to paying off debt that that's what it's there for it's for the quick win it's for the ankle biter stuff that

comes up in order to pay off debt which leads us to number four george pay off your debt smallest amount to largest amount regardless of interest rates this is where the math nerds show up all the math nerds are like why in the heck would you not pay off the 25 credit card versus well you'll save 300 in interest rachel if you pay off the highest interest first that's so dumb and i'm like or you could have paid zero in interest if you never went into debt so why are we having this theoretical discussion yeah it's so silly but the reason we do it again is what i was saying earlier, is these quick wins. And when you pay off that smallest debt, even if it's a $400 credit card bill

that's been just like laying around, right? You pay it off, you start to actually win and you start to feel like, oh my gosh, I can do this. And so that's, it's a powerful motivator. Yeah, getting out of debt is way more about hope and momentum and progress than it is about mathematical interest. And we've done the math. The amount is negligible about how much you're really going to save by doing the avalanche. And I just have not seen people come in droves saying,

Rachel, I did the debt avalanche, and that's why we got out of debt. It's likely you'll stay in debt longer or give up or fall off the wagon if you don't see that progress fast. All right. Last but not least, if crypto was yours, George, I feel like this is mine. Married couples to combine accounts. You would think that I just told you. You got three heads, Rachel,

telling us to do that. Yeah, I mean, like, I don't even, I mean, like, people get so mad. My last two- Where's the anger coming from? On Instagram, George, the last two reels I've done on instagram george my my the last two reels i've done about this over like three million views each and all in the comments they're like this woman is says a woman says a woman says a woman that's what a lot of them say and i'm like

i'm sorry can i go out on a limb and say those guys are single and i'm like yes she's gonna say that out loud oh man People get pissed about this. Well, they see joint bank accounts as she's going to take you to the cleaners. That's the very toxic mentality that some guys out there have. And I always have the asterisk, you guys. And on the show, we do this. And we've actually had callers that call in with situations. And we tell them the opposite of this advice.

If there's an abuse situation, if there's an addiction that's not being addressed, if there are things that you have to do to keep yourself safe, absolutely. Like, absolutely. I am not against that. But if you're just the married couple out there, both bringing in an income, but she pays these bills, I pay these, you go on vacation, they get the hotel, you get the I mean, your roommates, you are acting like your roommates. And it's never just about the money. It's never just about the account. It's the idea that you actually don't see yourself fully as a team and don't fully trust your spouse. And if that is you, then you need to ask, like, okay, why is that?

Because there's probably going to be other issues going on that are going to come up in other parts of your marriage. So we can go on and on about this. But I'm telling you, people that win with money when you're married, you see yourself as a team. You win faster. And I think your marriage becomes better. So many people have stood on this stage, George, to scream they're debt-free. And they talk about how unified they are as a couple. Well, it's transparency, accountability, communication.

You know, all the hallmarks of a great marriage. Be married. Be a team. So anyways, there you go. That is our most hated financial advice. And we love it. Haters gotta hate. You're. Be a team. So anyways, there you go. That is our most hated financial advice. And we love it. Haters gotta hate. You're only fueling us.

This is The Ramsey Show. I'm George Campbell, joined by Rachel Cruz this hour. This is The Ramsey Show. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Gabe has chosen to do so in Burlington, Vermont. Gabe, welcome to the show. How are you doing? Hey, guys. How are you doing? We're doing great. How can we help? So I'm 21 years old. I'm still a college student. I got

about a year left. I've paid off everything so far. I'm currently debt free. Um, and I'm on track to be able to pay off this last year, every semester as things go. There's cash flow. Exactly. Nice. Um, I, I also am in a relationship, um, and have been pretty intense on saving up living pretty, uh, frugally for the last, um, like the last year or two, almost maybe too much. And I've realized, I've just been listening to you guys, been talking, and I've been all about the intensity of the first two steps. But it sounds like after that, things switch from intensity to intentionality. And I've recently just tried to pick up a third job to make a little bit extra cash to do things like take my girlfriend out for dinner and just do those

type of extra things that I currently there or previously before that third job couldn't really put any money anywhere else. And I guess I'm just wondering if, if, if even that is the best move with me being at baby step three. Should I just be, you know, even with that third job, making the money that I'm making there and throwing it into a savings account to get myself through step three as fast as possible? It's kind of almost a relational advice that I'm asking. Has your girlfriend brought any of this up? As far as me taking the third job or not? Well, as far as going, hey, we never go on dates,

and you never want to spend a dime, and we can't do anything. She wouldn't say anything like that. So she's cool with all this. She's nicer than me. She's not struggling. Take me out to dinner. That's what I'm wondering. Is she reaping any of what you're selling here with all these jobs? Yeah. And Gabe, I mean, you guys are, you're in school. Is she a senior as

well? No, she's been, she's four years older than me. So she's graduated, I think two, three years ago. Okay. That's great. That's great. And I, and just so I have this clear, the two jobs you have, that is basically going for you to live off of and tuition, correct? Bills and saving up towards that tuition, yeah. Okay, okay. And then you're looking at baby step three. How much do you have saved? Currently, this last bit of after this tuition,

this next tuition is paid off on about $1,000, $2,000. Okay, $2,000. Yep, that's great. Well, I currently have $1,000 is for my safety net, the baby step number one. But, you know, beyond that, I have one or two. Okay. Yep. That's great. Well, I currently have $1,000 for my safety net, the baby step number one. But, you know, beyond that, I have one or two. Okay. Okay. That's great. And how much would a three-month emergency fund be for you?

Because, I mean, I feel like that's all you would need at this stage of life is more on that three to four months. So how much more of that $2,000? $10,500 is what I need to get to. $10,500. Okay. That's a sizable emergency fund for you. What kind of expenses do you have? Say it again?

What kind of expenses do you have right now while in school? Currently, I'm paying rent, and I have gas. You need to pay a little bit of gas to get to work. I have a phone bill. I have an internet bill and car insurance. Okay Okay. Like three grand a month, yeah. Okay, so nine, ten grand will get you there. Yeah, that feels right. So how much longer would it take while working these three jobs to get there if you were really focused? Well, if I get through tuition, that's kind of my biggest thing, is all of that saving money has just been, I know that expense is coming every semester. I want to stay out of debt.

So I've been using just everything that I make that goes in the savings. It's getting used to cashflow that tuition. After that's all done, I could probably get that in a year. Okay. Especially if I held this third job. And so you're not out of the woods yet

as far as intense to intentionality. Through Baby Step 3, we have to remain intense. Okay. Because what we don't want is— Sorry, I thought it was just 1 and 2 that were intensity. Yeah, you'd carry that through. Once you get to Baby Step 4, we can pump the brakes a little bit. And are three jobs sustainable, Gabe, for you?

Well, currently, I'm doing— Like doing that and schools a lot. And dating. Yeah, I'm doing 32 hours at my job as a cook. I'm doing about 10 hours as a part-time work with my church. Okay. And then I'm trying to door dash. That's the third job I've picked up. Okay, that's great. I've been doing that late evenings. Yep. And you know what, Gabe? I'm not feeling burnt out. I don't feel like I'm really fighting anything like that. That's great. I think that's awesome. Because honestly, the time to sacrifice, like you're kind of at the perfect season. Like I know everyone's like college, enjoy your life.

Yeah, I'm not interested in that. Yeah, I was gonna say like, you're a senior, you know what you want. And you obviously have goals. And this would be the time to be like, oh, yeah, I'll sacrifice and like, do that. Because once you graduate and you get a job and you're actually making a steady income, and obviously you're making great money now, but there's just something about being able to be like, oh yeah, I'm already ready to invest,

save up a down payment maybe for a house, and you get to move on to baby steps for and beyond. So with the dating thing, though, I was joking with you earlier. I'm like, well, she's nice. I'd want to go out to dinner, but I mean like you guys, yeah, you can date cheap. I mean, it's not like you guys have to go out to nice places and, and she obviously probably knows your goals and what's going on. And I mean, there's a lot of, I mean, and this would be true for married couples, right? Or I mean, anyone dating,

regardless of if you're in college or not, it's just like, how do you live life while doing baby steps one through three? And you want to be able to enjoy life to a degree to sustain yourself. So, I mean, we always talk about, you know, there's always free stuff going on depending on, you know, your city. You can look that up. You guys, I mean, go on a hike. I mean, like there's things that you guys can do together that doesn't have to be crazy expensive. And instead of going to the mean, there's things that you guys can do together that doesn't have to be crazy expensive. And instead of going to the movie, there's plenty streaming at home for the thousand subscription

services we have and you can always cook a great steak dinner at home instead of paying 10 times that at the restaurant. And if there's a special occasion, that's my job.

Oh, that's so true. Which means you're tired of cooking when you get home. Or he's the best and he can cook at home and it's restaurant quality. That's true. Oh, yeah, Gabe it's restaurant quality. That's true. Oh, yeah, Gabe.

I would definitely. That's great. Part of the reason she's dating you now. This is a big win. This is it. Right, yeah. Yeah, and you know, Gabe, too,

I'll say this. Like, this isn't forever because I know this can seem daunting and exhausting and you're like, oh, man, this is just, it's a lot. But this isn't your life forever, right?

It's just for a season to get an emergency van. And honestly, well done for you not only doing it at your age, but that season of life, like it will just propel you when you graduate and whether you continue to date her and may, I don't know if it moves on to marriage or you go and find a career, like just setting yourself up well now, it is, it's great. So have fun. I'll never regret that. You're never going to go like, man, I wish I partied more in college. That would have been so great for me. You're doing the right things.

And so I want to encourage you that you're being weird in the best ways possible. And everyone listening should be encouraged by that. What are you studying? Right now I'm trying to get a teaching license. I'd like to teach English at a high school level education. Awesome. That's great. So great. And what's awesome too, Gabe, is like, you know, obviously, you know, if we were talking about teachers pay, maybe a few episodes ago on my show and I'm like, and that's, what's even amazing is I'm like, you can choose to go into a career

field that, you know, you're not going to go make half a million dollars. Right. But you're able to make those choices and those decisions because you don't have payments that you're going to have to repay. So like, that's another reason doing the work on the front end is so great because you get to go do what you love and not be like, oh man, it's going to take me, you know, eight years to get out of the student loan debt on a teacher's salary. You get to take that teacher's salary and be blessed by it. And it's great and wonderful. And you've just set yourself up really well. So that's, I mean, you're doing a great job and you can still have a life and still have a great, healthy relationship with your girlfriend and be on baby step three.

This is incredible. And Rachel, the data shows that students who work 15 to 20 hours a week have a higher GPA than those who don't. And that makes sense to me. You're going, well, how is that possible? Well, junior has to be real disciplined with his calendar, with his time or Gabe to do. I mean, Gabe's working 40 hours a week. Yeah, that's insane, Gabe. And so, and he's still crushing it. He's going to finish completely debt free. Yep.

And so it's parents who are going, well, my son and daughter, they shouldn't work. They're focused on their studies. Oh, really? Are you following them around campus all day? They're in class for a few hours a day. There's 24 hours in that day. There's a lot of other stuff happening in those other hours. That's right.

They're at the library. Sure, sure. They wouldn't darken the doors of that library. I'll tell you that much. But hey, Gabe, we are rooting for you, man. Way to go. Love seeing young people just crush it and sacrifice now so they can live their best life later.

Awesome. More of your calls coming up. 888-825-5225. This is The Ramsey Show. Our scripture of the day comes from Exodus 33, 14. The Lord replied, I will personally go with you and I will give you rest. John Steinbeck said, it is a common experience that a problem difficult at night is resolved in the morning after the committee of sleep has worked on it. I like that. That's very Rachel Cruz, you know, just sleep on.

It's amazing what sleep can do. It is amazing. Especially when James, our producer, is in a crabby mood. I just say, James, go take a nap. Go nap, James. He always feels better when he wakes up. Trey joins us up next in Houston, Texas. Trey, welcome to the show. Thank you guys for taking my call. What's going on? We're hanging out, man. What's going on with you?

Not much. My situation, I haven't paid my taxes in about four years. When I was, I think I was about 23, I started this job at a warehouse. And we get paid without the taxes being taken off. So we get a 1099 form at the end of the year. And I kind of just have been putting it off, you know, and just not worried about it.

I wasn't making that much money. So I didn't think the taxes would, you know, be that much. But now I'm going to be making about $40,000. And I kind of just want to know what's the best action to take about getting all this under control. What's the total tax debt? Actually, I haven't. I didn't file or anything for those years. So, I mean, I just have my income amount. I don't have any idea what the amount might be. What the back taxes are?

Yes, sir. So has the IRS contacted you? No, they haven't. Wow. Well, my first step is to look in the mirror and go, what the heck is going on with all this, and what do I owe? Because it's not going to go away. Right.

They're not going to just go, well, just let that one slip by. Trey got away. So that's my first thing is I'm going to be proactive and contact them and go, hey, here's the situation. I haven't paid. I want to pay. What is the amount that I owe? Right. What's your other debt? So I have about $600 in credit cards, and I have a repossession in collections from like 2014. That's about it. What's that amount?

That amount I think was, last time I looked at it on my experience, I think it was about $14,000 was the balance, I think. Okay. And is that all of your debt? Is it $600 in credit cards? It's a really old debt. Yeah, $600 in credit. I have two credit cards that are $300 apiece. Okay. Do you still have the credit cards? Yes, I do. Okay. How much money do you have in the bank? About $10,000.

Okay. Well, let's clean up those credit cards today. Well, I was going to say the IRS debt needs to be first. He doesn't know how much it is. I know, but I would – we could disagree on this, George. I'm not sure, but – Listen, we could. I just don't know how long it's going to take to get those numbers.

I know, but I would be saving as much as possible because the irs stuff that that was kind of my plan i knew i was gonna have to pay some of my plan this whole time was kind of just stack up as much money as i can yeah and you can do finally do that yeah and you can just go online and do a rough calculation and look at your tax bracket look at what you made pull your pay stubs from the last four years, just to get a rough estimate of, okay, here's what it's going to look like. And again, but I would contact, yeah, get on a payment plan and pay it off as soon as possible.

Because the IRS stuff is something, that's like the first debt that you do not want to mess around with. Yeah, and like I said, it's just a little, I'm not scared about it. I know it's looming in the back of my mind, you know. Yeah. And I'm getting older. I'm 27, so.

Totally. Well, I'm really proud of you, Trey, for like, I mean, really, this is like being an adult, right? You're looking at yourself and you're like, okay, I'm an adult. I got to do adult things. I got to pay taxes. I got to stay on the, but like, I got to do this stuff. I have a kid as well, so. Okay.

Yeah, yeah, yeah. So you really want to, yeah, you're, you're starting to turn stuff around, which is awesome. So, um,

if I were you, I'd cut up your credit cards. I would, I would get on a really tight budget tray and cause you're going to be making great income. You said 40,000. I would see, you know,

if you, if there's extra work you can pick up, um, and then get, yeah, get everything in writing from the IRS of what you owe. And then that needs to be your first priority is to pay all that off. And then you're going to be working so much and making so much

that by the time it gets down when you're done with the IRS debt, that $600 credit card bill, continue to make minimum payments. But that will be wiped off real fast because of how much you're going to be working. But it really is this plan. I kind of wanted to just throw $600 at it and just wipe it out completely so I could stop worrying about it. Right now, you could. I mean, you could.

I'm backing out now. I agree with you, Rachel, that IRS debt, we do put at the top of the debt snowball trade, which is when we say list them out from smallest to largest, but IRS debt always goes to the top. But today, if I had to make one decision today with the information we have, I go, all right, well, knock it out.

Just write a check. Maybe it'll give you that progress, that little boost of, like, I can do this. I got rid of one, we can get rid of two. If we get rid of two, we get rid of five. So it's just not that big of a number. If it was five grand, I'd go, let's hold off on the credit cards,

let's focus on the IRS debt. But A1 is figuring that out. Yeah, that's been crazy. And I'd be working 60, 80 hours a week. I know you got the kid, so that could change things, but I'm going to be busting it to try to get that income as high as I can to clean this debt up as fast as I can. Because, Trey, what's so encouraging to me, though,

is hearing you talk where I'm like, you know, you're 27. Up until this point, it's like, you know, you've probably been working, but, you know, you had a repo, you have some credit card debt. You kind of just been like going through life. And now it just feels like this wake up call happened inside of you where you're like, I want to do this because here's what's crazy tray with the numbers that we're running. Once you are out of debt, you clean up the repossession, clean up the IRS debt, right? Which is going to take a little bit. This is not going to happen overnight. This will take,

this may take two or three years, but at your age, say you just started at 30 years old, what your life could look like from that point forward financially could, you could literally retire a millionaire because you have so much time on your side and you're able to start investing. You're going to have cash in the bank for an emergency fund. You're going to be saving for your kid's college. Like there's things, you know, in your mind. I have a Roth IRA too. Oh, that's awesome.

That's awesome. Are you putting money into it right now? Just $60 a week. Okay, let's cut that out because right now we're going to be focused on this debt. We're going to get back to investing. Yeah, pause it for now. And are you, so is there any other source of income

you could get right now to help clean up this debt? Are you already maxed out? I'm sure there's some things I could pick up to get some extra income in. Okay. Maybe some handy jobs. Yeah, I want you to point all of those dollars towards the debt. Obviously, we need to cover the four walls, put food on the table, cover your bills. But outside of that, it's not time to have fun. We're not eating out. We're

going to get game on, getting rid of the IRS debt, cleaning this mess up, and never looking back. Right. And we're going to send you Financial Peace University. That's nine video lessons that it's going to encourage you. It's going to give you a lot of education and give you that direct plan of what you need to do. And it will also give you every dollar premium, our budgeting tool, so that you can make a plan for all this money. It's all included at Ramsey Plus. So hang on the line. Austin's going to pick up and we'll make sure you get that. Doing great, Trey. It's a lot, Rachel. People are going through some things.

Oh, absolutely. I mean, it's tough. It really is. But, you know, we hear every show when we have debt free screams, which we've had to this show. And, you know, sometimes every hour on the show. And there's this consistency of people that when they decide to change help and fix my life. No one's going to come rescue me. I have to get up and decide what decisions am I going to make day in and day out that is going to change the way I handle my money and the progress that I'm going to make. It's up to me. It's up to me. And that's that factor. That's a hard decision, but it's freeing.

I heard Trey say, that's what I was hearing him call. I just heard him, I don't know what it was. This may not even be a story, but it's like the light bulb went off and he's like, I got to do this. I got to figure all this out. Time to be a grown up. And it's me,

right? And we're the answer. You're the answer out there. And yes, inflation is terrible. We're on the brink of a recession. Like every, this world,

it's crazy. It's crazy. Feels like the sky is falling. But it's amazing though, when you don't have debt and you pay it off, you don't have a car loan, your credit card bills aren't coming in every month, you have no debt, you have money in the bank saved. It's a different position. And that is what we talk about on the show all the

time. But it is, it's the truth that it's the money principles that work in good times and in bad times. Yes. And even people who think we're crazy are now going, maybe that advice isn't so crazy. Maybe we should get out of debt and have some money in the bank. Yeah. That could help. So you can do this stuff, America. You just got to decide, make a decision, look in the mirror and go, that guy in the mirror, that woman in the mirror, they're the problem and they're the solution. And that is where freedom starts. We believe in you. That puts this hour of The Ramsey Show in the books. Our thanks to Austin, Kelly, James, Ben, Andrew, Rachel, and you, America. Thanks for listening in. Until next time, spend wisely, save intentionally, and give generously.