The Ramsey Show - App - Don’t Let Toxic Money Situations Keep You Trapped

Episode Date: January 8, 2025

From the Ramsey Network, it's The Ramsey Show. I'm Jade Borshaw. Next to me is Rachel Cruz, and we're your hosts for today. We'll be taking calls about your life, your money, your career, your relationships, really whatever it is that you want to talk about. As long as it has some connection to your money, we're here for you. It's a live show. So if you want to get in, you can. The number is 888-825-5225 and we'll pick you up on the line. All right, Rachel, you ready to get into it? Let's do it. All right. Katie is in Austin, Texas. What's going on, Katie? Hi.

Hi. How are you? I'm great. How are you guys doing? Good. How can we help? So I was just calling to see if this was normal. My boyfriend has used the credit cards that are in my name,

and two of them are in both of our names, but I don't use the credit cards that are in my name and two of them are in both of our names, but I don't use the credit cards. And I was wondering if that is a normal thing because he's saying it's normal and I don't have to worry about the transactions because he's making, he's taking care of the bill. Yeah, I would have an issue with that. Well, first the mistake that I see is that you have credit cards in both of your names. So I think that that is a mistake because either of you can spend on them. And if either of you decides that they're not going to pay the bill. So let's say you guys were to break up and he ran up a balance on it. You're both on the hook for it. And if he doesn't pay it, it can affect you, you know, in a negative way. So that's the first issue. Then the second issue is then if you have a credit card that's only in your name and he's insisting on spending money.

Yeah, and it's him spending it. There's no guarantee that he's going to pay for it, right? The bill. I mean, there's a chance he doesn't. And then it's stuck under your name and you're completely liable for that. So how has he gotten access, Katie, to to your credit cards are you giving it to him or is he yes so we it was an agreement to uh open the credit card because i needed to build my credit i had no credit um at all and so um that was the way that

we were going to build the credit cards. I mean, the credit, using the credit cards. What did you need credit for? What were you trying to accomplish? Just the history. I had no history of any credit use at all. And did he say that that was a good idea? Yes.

Okay. It was his idea, I'm assuming. Of course, because I don't have any knowledge in the finance area. Totally. So, Katie, just so you know, so that you can be armed with some of that knowledge and education, the only reason you really need a credit score is to go into debt. And we really do believe the best way to win financially is not to have debt, is not to go into debt. And the biggest piece of debt that people get into that they're like, no, I have to have a credit score for is a home. Right. So when you go and apply for a mortgage, they will pull your credit score.

But you can do what's called manual underwriting. So you can actually get a mortgage without a credit score still. Now, places will pull your credit report, you know, maybe if you're applying for a cell phone or maybe for work or something. But if you don't have a history, all you have to say is, yeah, I've never borrowed money before and debt's not a part of my life. So you actually can go through life. And this is a big piece of misinformation. A lot of people believe you have to have credit in order to do things, but you really don't. Now, you have to have it to go into debt. But we, you know, again, that finish line, that start to finish of building

wealth, debt does not need to be part of the picture. So what Jade was saying earlier is exactly right. I would cut up all the credit cards, Katie. Any credit card in your name, I would cut up. And for you to keep everything separate, and you guys are already kind of combining, you know, purchases and all of that, I would keep your income with your expenses, his income with his expenses. Very, very separate. and then later on the road if you guys get married then that's when you want to combine them but um until then it's a very dangerous game that you guys are playing not just on the credit score game side but the fact that you have this other individual that legally you have no attachment to right i mean from the from a from a legal perspective there is no marriage nothing and and and we take the calls katie i mean which of course that legally you have no attachment to, right? I mean, from a legal perspective,

there is no marriage. Nothing, nothing. And we take the calls, Katie. I mean, which of course we're calling and show for money. So we get all different kinds of calls, but we get the calls that are, hey, my boyfriend broke up with me. I can't find him now.

He blocked me and he racked up $10,000 on my credit card. He said he was going to pay it. And now what do I do? And then that, Katie, we would have to say to you, well, you got to pay it because it's under your name. So it's just saying it's a big risk. That's what you're taking. And I understand maybe his intention was good trying to quote unquote help, but it's not helping. I mean, let's understand this kind of big picture because, Katie, you're not the only person who has gotten that misinformation. The truth is debt is a product. It is a product that institutions make money off of.

It's not something that's required. It's not a law. It's not like your driver's license where you have to have it in order to drive a vehicle. But it is marketed that way, right? It's marketed as this thing that you can't live without, you't do without and they'll even make it seem as though if you want a car you need a loan if you want a home you need this they make it seem that way but that is not the truth the truth is like rachel said a lifestyle without debt is absolutely there you do not need a credit score and the only way that the only reason it seems that way it's because it's such a well-marketed product that they have fooled us into that. And there's a lot of money that's made on it. And so a lot of people have kind of locked their arms around making it seem as though this is the case.

And it's truly, truly, truly not. The big areas where people kind of, I don't know, Rachel, I would say butt heads on us are, okay, then how do I buy a car? Okay, then how do I rent an apartment? Okay, then how do I buy a house? I feel like those are kind of the top three areas and rightfully so you should be asking those questions and the truth is we would say if you're in a car loan right now yeah work to pay it off very very quickly and then your next car make it a point that I'm going to save up and pay for cash even if I get something a little less expensive right that's how you get out of the

car loan debt and then for somebody who says, hey, I want to rent an apartment. The truth is there are lots of apartment complexes that will say you can't, we only go by credit score. That's true. There's also a lot that will go. And if you bring in other proof of purchase, whether it's your cell phone bill, electric bill,

maybe you lived with your parents and paid them rent, they will use that. So that is the truth same thing rental cars you can rent a car without having a credit card so anything that tells you otherwise rachel and i are here to tell you and kind of debunk that myth because it's not true and even the biggest one rachel buying a house yes we all know so many of us think you have to have a credit score to buy a house that's the biggest thing and it's just not true you can still do uh something called manual underwriting and in that they look at people who do not have credit scores that have a zero credit score and they go, OK, we believe that a zero credit score a good position to borrow money for a home.

And so I hope you learned that, Katie, on this call that it's not something that is necessary at all. Not required. Right. Yeah. Yeah. But again, it's understandable why someone would think that because in our world today, it is just so, so normal. So, so yeah, Katie, if, yep, if I were you, I would today cut up every credit card with my name on it. Not even just because of the element of what we talked about living without debt, but I'm going to say yours has an extra caveat too, because there's another person in your life using those credit cards under your name, which adds on a whole other level of risk that you cannot control, right? Some people think, well, I can control myself, right?

And we have a level of responsibility of ourselves. So that's, we can talk about that. But this is like an extra layer, Katie, that you, it's just a lot of risk. And I know everyone's in love all the time and we're going to be together forever. Everyone believes in the relationship. But again, we get the calls on the other end of reality of what happens. So I just want you to be protected, Katie. That's what we want for you.

We are here for you. And we want you to make these decisions in a really smart and wise way. Yeah. So at the end of the day, we're not putting other people's name. If you do choose to take out debt for the love of God, don't put someone else's name on it with you. That's really the moral of the story. And then, of course, don't go into debt, period, because you don't need it.

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In 2025, this is your year for financial success. I want you to join us January 23rd for our free live stream. It's a take control of your money live stream. It's going to be myself, Dave Ramsey, Rachel Cruz, George Campbell. We're all going to join together. We're going to show you how to get control of your money. We're going to take questions from you, the audience. Myself and Dave, we're going to help you learn how to stop paycheck to paycheck living.

I mean, we've all experienced it. And it's time to make the cycle stop. We're going to show you how to free up more breathing room so you can pay off debt fast and finally get ahead with your money. So Rachel Cruz, you and George are going to join us a little bit later for a Q&A. You can ask whatever questions you have about your money. It's absolutely live. And so it's like real time.

So that will be very entertaining. And if you didn't know, when you sign up, we're going to be doing some giveaways throughout the evening. We're going to give away $4,000 to five different people, a total of $20,000, which is pretty amazing. So again, the event is free, but when you register for it, you can sign up to get that free cash. So that's nice. Sign up for the free live stream by going to ramseysolutions.com slash live stream, or you can click the link in the description if you're listening on podcast or YouTube. Either way, you need to be there. This, Rachel, I really do believe that.

I feel like in 2025, so many people are going to draw that line in the sand and finally say, this is the year that I do that thing with my money and I make lasting progress. Yeah, absolutely. Well, and when you have an amount of time, right, that is so compacted with everything you need, like that's how we lay out these live streams. We're like, if someone is here for an hour and a half or however long it is, like we're going to put as much as we can into it so that when you walk away,

it's like, okay, I have a whole new set of tools. It might be overwhelming even, but it's worth it to sit down for an hour and a half and be there and watch it and do something different. Yeah. We're not preaching at you. We're giving you step-by-step advice that you can implement.

So that's really good, Rachel, to highlight. Okay, let's get into those phone lines. Oscar, Des Moines, Iowa is on the line. What's up, Oscar? Hey there, how are you guys doing today? Doing great. How can we help? So my question was regarding an issue I have with, more importantly, my dad. So my dad's always gotten into this habit of every so often asking to borrow

money which I'm not hurting for so I don't mind but he's gotten to the point where I dread taking his calls because it's not about checking up on me or checking up on the kids I always feel like it's going to be hey by the way can I borrow x amount of dollars so question is, how do I go about starting the conversation to where I tell him, hey, enough's enough? Yeah. How old is he, Oscar? My dad is 60. 60. And why is he needing the money? What's he using it for? Honestly, I don't even ask at this point. I'm assuming bills. Ever since I was a kid, he was never great with money. I remember when me and my sister were younger, we always had to help him translate,

let the landlord know that we were going to be late on the bills. And it's always been a never-ending cycle. Okay, so you don't think there's probably much to his name financially, and he's literally using it to stay afloat. Is he working? Yeah, he has a full-time job. How much does he make a year? Honestly, I don't know 100%, but I'd say somewhere around the $50,000, $60,000 range.

Okay. And it's just him? Or is he married? He's married. My mom still lives at home. She's had a lot of medical complications so she doesn't really work every once in a while she does get uh some like uh under the table work through a restaurant that our family owns but other than that she really doesn't have a stable

income do you have a relationship with your dad aside from this money or do you feel like this is the only contact you have um does he only do you know do you know what i'm saying he only comes around for money or do you have a relationship established outside of that well i mean if we have family gatherings yeah we get together i can we can be amicable but he never comes over just to hang out yeah i mean even when i was younger it was more of a business casual relationship. I can tell you right now, if we're sitting in a car for an hour or two, the most we talk about is the weather. Yeah. Do you have siblings?

Yep. I have an older sister and a younger brother. Does he call them? My little brother, he does not. He still lives at home. But he is of age to not live there. But he will call my sister if i tell him hey i can't help you anymore so i can't help you this week so then the sister calls have you and your sister

talked about it yeah me and my sister talk about it all done okay we're frustrated so you're both okay we both have our own families okay yeah one last question because i'm just trying to put the pieces together when he asks asks for money, how much? Like in a month, how much money would you give him? And then how quickly before he'd ask for money again? The most he's asked in one sitting was like $1,200. And typically, I guess the larger the amount, the bigger of a gap between him asking for more.

But I'd say roughly about once a month, maybe. And sorry, I'm fascinated by what's going on, and I'm also trying to dig deeper. If you had to assess the situation, is there anything unhealthy we should know about? Do you sense any addiction, something where this money is going where it shouldn't be going? Or do you truly think, listen, this guy, he has no budget. And because of that, he's late on rent. Is it just that simple? money. He's always been a guy who bought scratchers at the gas station, but it's never been, at least to my knowledge, so extensive that he would blow his whole paycheck on it. I know he's always, he's always been struggling with payday loans here and there. And, and the only reason I know this is a long time ago, I worked at a financial institution as a loan officer, and it was the same bank he worked at. And he would, they would always come to me and say hey what's going on with your dad and it got to the point where it was

stressing me out so much I couldn't be there anymore I didn't want to be part of his financial burden and it was taking a toll on me yeah absolutely I just I was stressing over something that I genuinely didn't have any concern over because at that point I didn't live in this house obviously he's still my dad I'm concerned about his well-being financially sure but where are you at oscar financially you and your family where are you guys how are you guys so i am right now on baby step number one okay i'm going to work towards two yeah i have all my debts lined up ready to go hopefully um by the end of this year i will have all my consumer debt paid off I don't have very much so to say that you you have an extra spare $75,000 in a high-yield savings account

to help your dad when he needs $200 a month that's non-existent like you guys are paycheck to paycheck you're starting to build a thousand dollar emergency fund yourself so so it's even so so what my advice Oscar to you is this, and even more because of where you are financially, right? I mean, I think there can be a different discussion and we talk to people on baby step seven, they've paid off their house. They've accumulated wealth. I'm like, listen, my dad's in his eighties and he's terrible with money and I'm going to help. And like, and that's what they choose to do, right? A very conscious decision. It's not being burdened upon them. They just decide that as part of what i'm going to do with my legacy and my money

you oscar on the other hand you i mean you guys are not in a financial position you're trying to save a drowning person while you yourself are trying to keep your head above water and it's and it's and it's causing that much more i would say probably bitterness and strife yes which is very understandable so um i mean this is always such a hard conversation because I think the parent-child relationship, especially as adults, is very difficult. But I, you know, what I would say, because it is, this is the truth,

is, and I'm going to butcher the quote, and I even need to try it. I wonder if it's the one I'm thinking of. It's about the fish, right? Don't give a man a fish, teach him to fish. Yeah. It's the idea that like, dad, I want to sit down and help lay out. And you could say, Oscar, I'm starting this process too, dad.

Like I'm starting to realize, gosh, I have to get my finances in order. And here's some things that I've done that I've realized, okay, here's my income. We've created a budget. My first goal is $1,000. Like you could tell him what you're doing and say, and if you want that, I would love to sit down. And this is if you want to, Oscar, but I would love to sit down and help you get on this plan as well. Because ultimately, this is just a few hundred bucks, right? I mean, again, he's not asking for $10,000

a month. So it's just these little pieces of discipline that may be hard for a 60 year old to restart, but that's where I would start and say, I can't give you anymore. I don't have it. And that's the honest truth, Oscar. You don't. I don't have the money to help you. But I would love to sit down and walk you through

kind of what I'm doing and let's see together if you can now get in a position where this isn't, you're not short a couple hundred bucks a month.

Good advice, Rachel. Yeah. Viola Davis said, don't let yourself on fire to keep someone else warm. This is the Ramsey Show. It's better. Hey, George Camel here with a not-so-fun fact.

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That number is 888-825-5225 in order to get involved. All right, Rachel, let's go to the phone lines. We've got Leah. She's in Rochester, New York. What's going on, Leah? Hi, thanks for taking my call. So I'm a single mom of one child. I make like $35,000 annually. I have no debt, no credit cards. I have an apartment. I have a 2014 Chevy. It's about to die. It's paid off, though. I'm a residential cleaner.

I work like 20 hours, maybe a little more per week, part-time in school, long-term goals, med school. I'm in a co-parenting. It's a high-conflict situation. I spent my last $5,000 on an attorney, and I'm going to be going back to court. Sorry. No, that's okay. Bottom line is I need to make more money while I'm going to school. I'm not really sure how I have to get a used car because mine's breaking down. And I'm not sure if I should invest some of the child support that I get for my daughter

right now, like in a Roth IRA. I'm not sure how much. And I want to know what, with a little bit that I can say, what can I invest and what should I invest? And I have no clue where to start. Sure, sure. I mean, it sounds like everything that you are saying are very important things. And so you are thinking about the right things. I think for Rachel and I, it's just narrowing it down to what's most important right now and kind of giving you a step-by-step on what to focus on first, second, third, fourth,

that sort of thing. Leah, tell me about your schooling. So you're starting a new semester, I'm assuming. How are you paying for school? Oh, go ahead. No, no, that's okay. So no, I do get, school is paid for right now through financial aid, but I am taking a semester off to take a break with court

because it's going to be very stressful. Okay. Okay. Do you see, and do you know from where you are within the divorce? Like, I don't know, this is a hard question to answer is there is yeah is there like a um in date that you see do you think okay yeah we have a couple more of these so it'll probably be in the summer or do you think like it could be a whole other year or two um well no divorce never got married but okay it's just custody depends this i think this will be a forever um i think it'll always be going back or at least for quite a few times. But I have full custody. So that's good.

How old's your child? She's seven. She's seven. Okay. So she in school then during the day? Yeah. Okay. So childcare and all of that is okay.

Yeah. Yeah. And Leah, working 20, so you're working 20 hours a week. Are you able, tell me about like your monthly expenses. Do you feel like you're able to cover those? And you're basically at zero at the end of the month? Are you behind? Are you ahead? Do you have margin kind of where you are compared to your salary versus what you make versus your expenses? Yeah, so I have a budget plan, honestly. To be honest, I haven't really paid attention to it. And that's something that I've been lacking consistency and discipline with. So I know that, and that's something I need to change and I want to change. You mentioned... I can...

Go ahead. No, you go ahead. So I, as far as like saving, I'm not really saving that much. I would say like I make around maybe $2,800 a month. Is that including the child support? Actually, no. So what do you get? What does he send? Technically, I get $44 a week um for 44 a month okay from child support

and yeah yep um okay i'm sorry i'm supposed to be getting 44 a week i apologize but um and i am getting i did just um like arrange a new plan with him um can you go back leah can you clarify for rachel and i when you say 44 a week are you saying four thousand four hundred dollars a week is what you're supposed to be getting from the dad 44 in child support 44 a week a week yep got you and you're only getting 44 a month right now um no i'm getting like 170 but um in total so so that's just for through the state like that that's on paper um i did i did arrange something with dad in person and we talked and so i've been getting on top of the 44 weekly um a hundred dollars um he just pays me himself like weekly so in total let's just say like around 560 right a month in child support in total 560 yeah okay okay um and you mentioned

okay you mentioned earlier on about roth iras and things like that. Right now doesn't seem like the time to do that. It seems like you've got bigger fish to fry. You've got an attorney fees that you're going to have to pay. You've got a car that doesn't have much more life in it. Did you say how much you have saved? You said you're able to put a little aside. What do you have in savings right now? I have like $950. Okay. $950. Okay. So my lawyer, my attorney has paid off. And like I said, my car is paid off as well, but it's on its way out. Okay. If I were in your shoes, I think I'd be focused on stacking up some money for this car, because if this is your only mode of transportation, you're going to need to be ready for that. What do you think that's going to cost you?

Have you looked around? I have looked around. I'm not sure, like making $35 a year, like what I should spend. I don't know, like 15% of that, maybe a little more. Well, we're not going into debt for it. So you're only going to be able to buy what you can afford to save up and get. That's really what's going to inform this decision. Okay, I see.

Yeah. Okay. Yeah, I don't want you, let us clarify at this point with anybody, not just you, anybody who calls and we're never going to suggest debt, but specifically here, because your income, you know, you can't afford to add any other risk or frustration or stress or anxiety to this equation. And if you do debt, you're definitely adding that. The good news is you've got $950 saved. Your car hasn't busted yet. So you've got time to set some money aside. You've got some time to do some shopping, figure out. Yeah. And Leah, I would probably take on,

because you're making great money for 20 hours a week. I mean, that's, you know, and I would, if you're taking a semester off, I would just. I was thinking of taking on more clients. Yes, and I would, Leah. I mean, I would say like this whole semester, like I'm going to work more than probably I've ever worked because I think these goals are really big, right? To have some cash for a car. The first goal is to get $1,000 in the bank, which you basically have.

And then the next goal would be pay off debt, but you don't have debt, which is amazing. And so then the next would be an emergency fund. But part of that is knowing if big life things are happening, like a car or fees for an attorney, right? Like all of these things that I would want a big fund. And this could also be your emergency fund, right? You could have a savings goal. But to know that I need

some cash in the bank ASAP. And so I would have enough in there for, you know, three months worth of expenses. I would have enough in there for a new car. And that could be a $7,000 car, Leah, right? I mean, it doesn't have to be a brand new, beautiful car. And then think about when you sell yours, you know, that adds to that. I would kind of average out attorney's fees, what would make you feel good, right? And I would just have a big emergency fund. That would be my very first goal before investing or anything. And then once you have your feet under you saying, okay, yes, I have my car, I'm in good shape transportation wise. I have some cash here for an attorney, I have some cash in the bank for an emergency fund. Then we can start thinking about the future. But until then, Leah, I would just get some cash in the bank and I would not invest it.

I would just keep it in a high yield savings account. Again, with the goal to get three months worth of an emergency fund along with a car and attorney's fees, which is thousands of dollars. I mean, what I'm saying here is like, this is long term. This may take you a year to do, which is fine. And then there's plenty of time for investing and catching up with all of that but i would do that i think that would give you a lot of safety and security and again the the beautiful thing about this is that you have the time like you were just working 20 hours and if you just doubled that i mean think about you know you would be bringing home you know close to um you know without child support close to close to $6,000 a month. Like you can,

excellent. You could, you could do this. That changes your whole, that changes everything. And Leah, kudos to you and all the single parents out there, because that is one of the toughest positions to be in. And when you have full-time custody, for sure. And you are the only one in charge. And I mean, it's, it is so much work and it is so exhausting. So from mom to mom, I just commend you and the single moms out there. And so you're doing an incredible job. The fact you don't even have debt, Leah, I'm like, you're doing great. So just keep up the work saving. Very, very good. This is The Ramsey Show.

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Is it still, can we still say Happy New Year? It's still January. I feel like you can say it for a while. I feel like it's festive. It makes everyone happy. Today's question of the day is brought to you by YRefi. YRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed interest rate that you couldn't get anywhere else. So this will help you stick to your budget and get work on the debt snowball. So go to YRefi.com today slash Ramsey. That's the letter Y-R-E-F-Y.com

slash Ramsey. And remember, it may not be available in all states. Today's question comes from Erica in California. We are currently in baby step two. My husband and I both grew up in homes where our parents never discussed money or taught us how to manage it. We have two kids who are in their early teens, and I want to teach them how to be smarter with money than we ever were. Being so new to this and still figuring it out ourselves, I'm not sure how to go about teaching them. When my son got his first job, we opened up a bank account for him, and he has a debit card. I have noticed he is purchasing things that I think are silly, but I don't want him to feel like I'm constantly nagging him for what he's doing with his own money. How do you teach him to budget when he doesn't necessarily have recurring bills every

month? I'm overwhelmed with my own stuff and trying to teach him something I'm figuring out at the same time. That's good. It's a great question. I mean, part of me and Rachel, I've even heard you say this. I think with kids, they go so much more by what you do than what you say. I mean, of course, they're listening to what you say, but your actions are backing it up. Yes. And so if you're in baby step two right now, they're seeing in real time what it looks like, as long as you're open about it to the proper extent, they're seeing in real time what it looks like, as long as you're open about it to the proper extent, they're seeing in realtime what it looks like to be on top of a budget, checking your budget, checking in with your spouse, making smart choices. They're seeing that more than anything. And weirdly enough, I

don't think we give enough credit to that because most of us, if you were to say, give me a picture of what money was like when you were growing up most of us could say oh when I was growing up my parents never talked about money or when I was growing up you know it things were never tight it just felt like we had what we need or when I was growing most of us can look back and we have a very clear picture of the way money was presented to us and so knowing that as a parent I think like I know for Sam and I, we're always very clear about, oh, you know, we're doing our budget for the month or we talk about it. So knowing that when they look up, they're going to go, oh, yeah, my parents, they always mentioned

a budget or they were always very mindful of what we were spending. That's right. They always said things like, well, if you can save it up, you can get it. So there is a practical side to it, but there's also so much just in the intentionality of everyday language and how you're speaking about it with your spouse, I would say. Yeah, I agree. And I would say too, that when you are under the roof of your parents, right? And I think about growing up, I made money mistakes. Like I spent my money on stupid stuff, like that I know my parents thought Like that is so dumb and I was the kid that if I had Money I was going to spend it like I would go

Get silly putty from like a Just to buy something I mean I genuinely was just such a spender And I remember sometimes making comments But they did such a great job Jade of Letting us make those mistakes Because you realize it even as an 11 year old you could do something and buy money You know buy something with money you've earned of letting us make those mistakes. Yeah. Because you realize that even as an 11-year-old,

you could do something and buy money, you know, buy something with money you've earned and then realize like a few days later, oh, that wasn't fun. Yeah. And I mean, you do, you experience these lessons. So where something may feel silly to you, maybe it is, maybe to him it's not

because he's 15, 14 years old and you're not. But I would say let them experience these emotions themselves because the more life experience they have around money themselves, even as teenagers, even if they don't have recurring bills, any of that is teachable moments.

So when they go off on their own, they're not experiencing those emotions for the first time at 18 years old. They've already experienced it at 11, 12, 13, 14. So again, I wouldn't be legalistic about it. I do think some parents, and I'm talking to some of you Ramsey fans out there who are very hardcore and you're just like,

no, and you're so legalistic and then it drains your kids. So there's a lot of grace in this, a lot of life to kind of give and take and they're going to learn, you're going to make mistakes. You're not going to be consistent so much. They're not, I don't know.

It's just a part of life. But I think the fact that it's present of what you're saying in conversation and in the household is the most important thing. Yeah, that is so true. I heard someone say a long time ago, it wasn't that long ago, but whenever your kids hear something for the first time from you, the parent, you become the expert, right? So that could be, I don't know, relational. That could be with money. But in your home is probably going to be the first time that your kids start hearing about money, thinking about money. And so you become the expert. And so you have to be very intentional

about what you're putting out there towards them. It's just a good kind of framework to think through when it comes to that. But for sure. Very, very good. All right, let's go to John. Fargo, North Dakota. What's going on, John? Hey, Jay and Rachel. How are we doing today? Doing good. How can we help? So, is there a point where a 401k

match is too good to turn down in Baby Step 2? A little backstory. Right now, I'm about 30 years old. I make $190,000 a year, and company offers a 4-1, 4-1K match up to 15% on their end. So I put in 4, they put in 15. Okay. Yeah, listen, I love great benefits.

I think that that's a wonderful thing. It's a wonderful cherry on top of whatever it is that you're doing and your salary and everything like that. I'll also say this. Everyone thinks their situation is the exception to the baby steps. And the truth is it's not. For me, there is never a time where I would say, you know what, in baby step two, I'm going to invest as well. Because the truth is this is a proven method and it's what works.

What we find is that when you focus on more than one thing at a time, you go a lot slower. And when you have a slower pace, it's harder to stay motivated over the long term, right? And so you've probably heard it said before, your biggest wealth building tool is your money. And that's true. And that's probably what you're thinking. You're like, man, if I can, I've got this money at my disposal. I've got this match at my disposal. I've got to go quickly. But the truth is, if you were to split your resource in that way, it's going to take you that much longer to pay off your debt. And when it takes you that much longer, the chances of you becoming less motivated are very, very high. And so for that, that's my first reason I wouldn't do it. The second reason I wouldn't do it is because if you're jumping around in the baby steps and you go, OK, I'm going to invest instead.

Chances are you also have not saved up three to six months of expenses, which means if something were to happen, the first place you're going to go is wherever your money is, which is to your 401k or to credit in order to borrow. And so there is a reason that these baby steps are in the order that they're in. It's because it's going to serve you best regardless regardless of what life throws your way does that make sense yeah i think that makes sense i mean it slows us down by one month at the end of it but at at retirement age that would go to about a million dollars so we're talking about wait that doesn't make sense no one month one month is what you're saying, is what you would not... Yeah, about $7,600 a month

is what we're putting in, including our minimum payments. $7,600 you're putting in where? Towards debt? Into debt payments right now. And that's about what I contribute yearly to 401k at 4%. Hold on, hold on, hold on on you're saying you put seventy six hundred

dollars towards your debt every single month and then you're saying that your contribution to the 401k would be what about five hundred dollars a month is in the raw so about six thousand dollars how much debt do you guys have john about eighty About $80,000. So it's a delay of one month. Do you guys have any, do you have any savings, any cash on hand? We have a kid on the way, so we have about $10,000 in stork mode. Okay. A little higher than our max out of pocket. Yep. Yep. Okay. Well, delaying it One month Is not going to That's not going to completely Change your life at retirement

Like you said a million dollars $7,600 From $30,000 to $60,000 Just that amount With compound interest Is not going to equal a million dollars No the company is matched And put it into that so then that comes

out to about 35 000 okay i'm not i'm not really so you're saying oh if you put in 6 000 for the year they're going to times that by four is that what you're saying so it's going to be 20 uh 24 yes so you're saying max out completely for the year instead of the month yes okay i see what you're saying well then i would just i would i would go ahead and just pay off the debt and put some cash in and then and then i would do that and then go and do a roth ira and max it out at seven thousand dollars and then you're probably going to end up even. I think the whole conversation of this is what you want right now as opposed to what's going to work best for you long term. You're going to do what you want to do because you're a grown man and we can't stop you from doing that.

But if you want to know how to work the baby steps, we just told you how to do it. This is The Ramsey Show. From The Ramsey Network, welcome to The Ramsey Show. I'm Jay Borshaw. Next to me is my good buddy, Rachel Cruz. We're your hosts for today, taking calls about your life and your money. Hope you're having a great new year. I hope it's off to an excellent start. And if you need any help with your money, your relationships, your career, you are in the right place. We're here to help. And that's what we plan on doing, taking some live calls from you guys. So let's get on with the first call. We've got Beth, who's local, Nashville, Tennessee. What's going on, Beth? Hello. Hi, how are you? Hi. Hi, I'm okay. How about you? Thank you for taking my call. Yeah, how can we help? Well, I'm hoping that

you can because I'm kind of at my wit's end. I've been married for almost 30 years and after, and I'm 62 years old. And so is my spouse. After we had children, sort of the division of labor, if you will, was I took care of everything, but the finances. I took, you know, the household, the children, everything. And he was to pay the bills and has done that all of these years. Unfortunately, I've recently learned of some pretty catastrophic, devastating financial information that, well, he's had three huge job losses. They were all well-paying jobs. He did invest in the 401k.

I'm not, I've never been sure about how much was in there. I think it might've been maybe 170,000. It's gone. Each time he's had a job loss, it's been a two or three year gap in between because he refused to take anything other than an upper management position. And I've learned he's spent retirement savings. During those years to keep you guys going. What did you think? Can I just ask when those timeframes were happening,

where did you think the money was coming from? Well, I asked him and to be frank, he's got a lot of major management issues. I've always pressed to try to have a household budget. I was debt free before I met him. I had accumulated $30,000 in retirement myself. And anytime I would press it, I became fearful because he would get terribly angry. But if you had to ask yourself, where did you think the money was coming from? Did you have something in your heart that you thought, oh, gosh, we're probably on credit cards or we're probably on? Yeah. Yeah. In my heart, for sure. But he just kept saying, quote, relax, quote, everything's fine.

Don't nitpick me. We're fine. And he just kept saying, you wanted to do this budget and asking me these questions is showing you don't trust me. Well, apparently I had reason not to trust him. Of course. Yeah, for sure. When did you find this out, Beth? About two months ago.

Okay. And there's no money in the retirement. And it's because, I just want to clarify, that he's been spending it throughout the years. Or did he take a massive withdrawal and spend it in the last year? He's been spending it throughout the years. Okay. So he's just been dwindling it down. And now you guys are 62 and you don't have anything.

Well, not only that, but he had accrued as the financial manager of our family, he had accrued about $80,000 in credit card debt. And in 2016, we did a cash out refinance on the house to pay it off. He promised it would never, this would never happen again. And then in 2016, I became very ill. I wasn't expected to survive. I had no idea what's been going on since 2016 with our finances. And now I'm, praise the Lord, I'm recovered enough to work part-time. But that's all. And then all this time, his most recent job loss was three years ago. And I finally convinced him to sell cars. So he's selling cars.

How many cars do you have? No, he's selling cars at a car lot. Oh, oh, got you. Okay. Yeah. To make money. Yeah. He wouldn't get a job before. But now all of a sudden, six months ago he said okay I'll sell cars. So today today what is the financial snapshot is it still the $80,000 in credit card debt and that's it or give us a today picture of what's going on. Yeah we paid that off with the cash out refinance back in 2016.

Okay so then tell us. Then we now have $126,000 in debt, new debt, since the $80,000 was paid off. And is that because of the mortgage, the refinance, or is this consumer debt? Consumer debt. Okay, break that down for me. What does that consist of? I've had to do a lot of digging here. I took some notes. There's a $77,000 in credit card debt.

Is that in his name or your name? $30,000 is in mine, and $47,000 is in his. Okay, Keep going. And then he got his sister to co-sign a HELOC on the house for $50,000. And now that's all gone too. So in total, it's $127,000. And real quick, let me ask, where did the $50,000 and the $77,000 of credit card, what did that go to? Was that just lifestyle because he's been out of work for three years and you had a health issue like was it going to bills and keeping food on the table um yeah okay okay and honestly he was not a very good money manager and every time i wanted to have a budget well no no one was i want to call that out

neither of you were good money managers um but i also before we move on can you tell me about the house can you tell me what you owe on the house and what it what what it's worth um yeah i think i wrote that down um we paid 390 I paid $390,000 10 years ago. Now, I think on Zillow, it's between $800,000 and $850,000. And what do you owe on it still? Oh, that's a good question. I thought I wrote that down here. I think we owe, because of the cash out refinance and the HELOC, about 360. Okay.

So the good news is you've still got a ton of equity in it. You're no longer together. Are you no longer together? What's happening here? It sounds like somebody that you would no longer be in a relationship with unless you're doing deep work to fix this. So what's taking place with the relationship? I've been trying to do the deep work for 30 years and i've realized that it's it hasn't changed yeah beth so this would be a scenario which doesn't happen

often but i you're a 62 he is lying to you he is an angry person that you can't breach a subject with which is not just money beth this is an insight picture into the marriage right and so this is this is your entire life and this is a time I would say I would have my own money 100 I would get your own checking account which we rarely say this we're the show that's the opposite but but in a situation like this this is when things come up that literally he's he's driving you guys with his pattern of behavior over 30 years with no no flag change, it's going to continue to go down this lane and that's not going to be healthy for you. And so if I were you, Beth, I would, I would, I would talk to him and say, um, until I can, until trust can be built back and I see a new pattern,

we're separating our finances, um, because it's a symptom of how our marriage has been. And, and again, we don't have time to dive into that but I bet if you will stay on the line Kelly's gonna pick up and I'd love to put you with a financial coach because there's so many things to untangle here not just from the financial perspective but also the relational perspective and Beth and I want you to be protected I do and I and and this is this is really difficult and I'm so sorry and I hate that we don't have the time on the show to to dig into more but um but if you hold on the line Kelly you'll pick up um and I'm so sorry, and I hate that we don't have the time on the show to dig into more. But if you hold on the line, Kelly will pick up. But I'm so glad that you called. There's a time in your life and at the baby steps for renting, but you don't want to do it forever

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That's churchhillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. RentWin Tennessee 37027. This is The Ramsey Show. We've got open phone lines, so if you have a hankering question about your life, your money, your career, your relationship, daycare, whatever it is that's on your mind, give us a call. We can help you out with it. Maybe it's your budget. It could be any of those things. We'd like to help.

We've got Gigi on the line from Los Angeles, California. Gigi, what's going on? Hi. California. Gigi, what's going on? Hi, I just had a question about whether I should pay off my credit, I mean not my credit card, pay off my car or save money towards a deposit for an apartment. So a little background story. I'm on baby step number two. I will have all of my credit cards paid off this month. So I've hunkered down with about $18,000 that I got paid off. I have a daughter. I recently moved back home with my mom. I am I am married. Um, I'm going through the immigration process with, uh, my husband and, um, my two stepdaughters. So they can be here next week, next month, next year.

There's no real big timeline and there's no room for them, um, at my mom's house, of course so i'm wondering um in this time should i just save up money for a deposit for an apartment so i'm ready when that time is coming is they're here or should i just go ahead and continue to try to pay off my car and where are they now um they're in uganda oh okay okay and you don't and you're saying you they could come next week, next month, next year? You're not sure is what you're saying? Yes. Okay. We're not sure.

How much money would it take to have a deposit for an apartment? Deposits, two-bedroom apartments out here are about $2,200. Okay. So I would say I need about $66,000. $66,000, okay. $ 2,200. Okay. So I would say I need about 66. 66. Okay. And how much is left on your car? 16,000. 16,000. Is that your last debt? Yes. Okay. How much are you making? What do you bring home every month? I bring home about 3,600 and and I've been putting $1,500 a month on my debt. So it looked like I would be due to pay it off in about maybe nine, ten months. Okay. And is your husband working while he's in Uganda? Does he have any money to speak of

in this? Yes, but his money is just taking care of him and the girls over there. We're not. OK, no extra really. OK. Yeah, there's part of this where this feels a little bit like like a not a storm, but something that does need to be prepared for. Because what you're saying is if they got here next month, I mean, how likely is that? How did you guys meet, Gigi? Sorry, I'm just, I'm curious.

Oh, no problem. We met through missions. I would do missionary. So you were over there and you guys met, fell in love. Oh, that's so great. You're going to laugh at me, Gigi. The reason I'm asking is we've gotten two calls on this show with people that have met online. And it's been like a scam thing. And we've had to follow up with them and like help with all this. So for a split second that came to my mind, I'm like, you have met him in person, right, Gigi? Oh, my gosh. Isn't that funny?

I did have that thought, though. That is funny. That has happened twice on this show. Okay. So he's a real guy. You know he's real. Yes, I know. I'm just asking how you met. We've been married for three years You know, he's real. Yes, I know. Just I'm just asking. Just asking how you met.

We've been married for three years. Beautiful. It's beautiful. Month old daughter. OK, that's great. We know it's real now. OK, really funny. OK.

So, yeah, I yeah, I would make it because there is if they came. I mean, you guys could maybe last a few weeks at your mom's. But you're saying like there's no room. There's no room. Yeah. Yeah. So and how much is your car payment a month? How much are you paying on that? 360. Okay. Because there's always like this balance of, you know, paying off the car quickly, because that frees up that car payment, plus what you were paying on the debt, and it kind of just snowballs into more money every month to put towards that apartment um so i would i mean um yeah the price that that priority is tough um but part of me feels like part of me feels like right now you said you're putting fifteen hundred dollars a month

extra towards the debt part of me is like okay if you put a thousand aside you can be done with this in six months and still have made some progress on the car if you wanted to or you could say i'm going to stop one and do the other like i'm going to stop i'm going to save up six thousand dollars and then i'm going to push play on the car which is probably what i would do because if what you say is true like like it could literally be next month or yeah in two weeks or turn around and be in a year it's not going to matter they're both going to be taken care of um because it's considered a four wall at that point your food shelter utilities and transportation and so when they come over you guys have to have a place to live so that would be right in a in a level of priority so yeah so you could go ahead and just save up like you're saying

jade in six months you'll have that set it aside and then and if you had to gg you know you could be like godly i I'm so close to paying off my car. I can go grab out of that account a few thousand dollars, you know, if you're that close, right? So it's still your money. But it would, in that case, could be considered one of your four walls. I mean, if you put all this money towards it, you're going to be done in four months. If you put the whole $15,000 or $1,500 towards it, you're going to be done super fast.

So, you know, you could probably do either and be fine. But to Rachel's point, prioritizing the house first is probably it. Yeah. And Gigi, are you good with all the fires and stuff going on right now? I was just seeing. I've been following on the news. Yeah, it's crazy around here. I think a coworker of mine, their friend lost their house to a fire, but we're doing okay.

You're okay and you're where you are. Okay, good. We're a little bit outside of LA limits, so we're okay. Can I ask you one more question now? Sure, yes. And I guess, so we're saving for this apartment and being that I make about a 59,000 a year. Um, so being that apartments are 22,200, maybe for a two bedroom, would it be, it's going to be, maybe it's going to be over half of what I make per month. But being that I'm debt free at that time, would that be something that would be okay?

Because I know it's usually no more than 30% of your income. Well, I would include him working at that point. So you'll be having more money. So that will significantly should go down. And you guys should make that a goal to go down. So yeah, it doesn't change whether you're debt free or not. Housing in general should be around a fourth of your take home pay. But I would add his job and his income in with that. Okay. And I don't know. I mean, you didn't mention this. It seems like you might be in

an expensive area. If there's no purpose in you being, you know, I'd look further out, especially if you guys have goals to pay off debt. I don't know if he has debt, but it could be worth it to have any debt. Well, and from a lifestyle perspective, you know, LA, it's just very expensive. Yeah, it's tough. You know, from a Yeah, just the standard of living and the and what you're paying for things. You're in a very expensive area. Southern California is so so to Jade's point for your overall and this could be a you know, maybe something you guys think about, especially if you're looking to buy a home, and this will be in a few years,

this is more long-term thinking, Gigi, but there is that conversation that people are having with a family and just saying, oh my gosh, we can't live the level of life and have the margin and the freedom to do things we want where we are geographically. And so people are having those discussions to Jade's point. So that may be something you guys talk about later once they get here and you guys kind of get settled. But that's a reality for a lot of people. Well, and that also raises the point of we talk all the time when it comes to mortgages. Yeah, the percentage shouldn't be any more than 25% of your take-home pay. And we talk about that includes taxes, HOAs, like any fees, that sort

of thing. But the truth is it still applies with rent too. Because the overall principle still is in place, which is if it takes up more, especially more than 30%, you're really going to feel that. Even if you're only renting for the next three years or whatever it is, it still cuts so much into your day-to-day that you're going to feel it. And especially if you're trying to get out of debt, you're definitely, it's going to take a toll on your month-to-month expenses and what you can really accomplish. So. Yes, for sure. Yeah. And it does. And what's hard too is a lot of people, and based off of calls we've had recently, you know, that they base it off of a two income.

It's kind of what we just did on that call. And the danger, even with that, sometimes it's just always something to keep in mind is that, you know, they have a baby and you realize, oh, I want to stay home. But where you live, it's a two person household, two income household to keep that standard of living. And so when you make decisions like that, it kind of uproots and changes a lot, which is fine. But you have to be thinking about all of this. That's really good, Rachel. Having that foresight to go, OK, what season of life are we in? Are we in a season of life where we're still having children?

Could there be the idea of one of us staying home? That is so, so smart. Really good. Oh, this is The Ramsey Show. Hey guys, I'm Jade Warshaw, and I want to talk to you for a quick second about student loan refinancing. If your payment and your interest rate are burying you and you feel like you can't dig out, refinancing your student loan debt might make sense. That's because a lower rate could free up more money in your budget and a shorter term could help you pay down your debt faster. So reach out to the student loan refinancing experts today at laurelroad.com slash Ramsey. There you'll find helpful resources like a student loan rate table,

a refinancing calculator, and other tools. Plus, you can get an initial rate in just a few minutes. Laurel Road offers low competitive rates starting under 5%. And you can get your interest rate even lower if you sign up for auto pay. But if your situation is more complex, sign up for a free 30-minute consultation with one of their student loan refinancing experts to get your tough questions answered. Listen, not everybody should refinance their student loan, so make sure you run the numbers. But for some people, it is the right move. Learn more at laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's laurelroad.com slash Ramsey to find out more about their student loan refinancing. That's

laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is my buddy, Rachel Cruz, taking your calls this hour your life your money your new year's resolutions get in where you fit in so Rachel there's a lot going on with the housing market we're seeing some trends you've got some input on it so I'm gonna let you take this and drive it on home yes there's um yeah been I would say good towards the consumer when it comes to mortgages so we are seeing a trend that mortgage rates are going down and they're expected to keep dropping in 2025. So rates on a 30-year fixed rate

mortgage fell to 6.12% in late of 24 and they keep decreasing and they're not going to go back to, you know, two to three percent rates like they had pre-pandemic, which was beautiful. It's not coming anytime soon, but again, we're continuing to see it drop which we love housing prices they're staying pretty steady and again they might level off but with the low inventory it's kind of keeping that stable and so they're not going to expectedly like drop drastically so it's still this idea if you're on the sidelines and you're ready to buy a house this whole idea of like oh there's a bubble it's gonna pop i'm gonna get a great deal it's probably not going to happen they are pretty consistent and the federal home loan mortgage corporation even predicts modest price growth

in 2025 so values will continue to rise inventory is slowing so inventory grew 29.2 percent in 2024 compared to the previous year now they it is still below average or pre-pandemic levels. And more homes are on the market to give buyers more options. And sellers still have the upper hand in most areas as demand. Little by little, it's getting better. Exactly. Exactly. Buyer demands could rise.

So if interest rates keep dropping, then obviously there's gonna be more competition. People are gonna get back into the market to buy. Foreclosures will stay low. Foreclosures declined 13% in 24. And this trend is expected to continue in 2025. Again, they're rare out there. If you can find a good one, that's great, but they're pretty rare still.

So some of the takeaways for what we're seeing in the housing trending in 2025 is for buyers. If you're looking to buy with rates trending down and inventory improving, you might find more opportunities to get into the market. And you may have some more options when it comes to housing. But again, do not overspend. When you go to the mortgage company to get a mortgage, they're going to offer you way more than what you need. So stay within your budget. If you are selling, this is still your market.

And homes are priced fairly. If they are priced fairly, they're going to still sell pretty quickly. And again, for everyone, you can't wait for the perfect time for the housing market. It's the perfect time when it's the perfect time for you. So if you don't have debt, you have an emergency fund in place place and you have at least a 5% down payment, go ahead and get in. Because again, the housing values, the price of houses are not going down. You're not going to go get a deal next year. They are the same, if not modestly increasing. So the value of our homes, it is still going up. Which truly is good news because these are investments for us and we want them to be going

up. Even if you're not in the housing market yet, that's a good sign for all of us. But Rachel, you made a really good point because when you go into this, you've got to know your numbers. You've got to know what your parameters are because they will, like lenders will allow you to borrow sometimes up to 50 percent yes maybe even more of what you're taking home and so just because they say you're approved that is not your signal to go all right everything's all good a banker says like i can afford this yeah that's a red flag people you need to control that on your own ends you know and it is wild when we think about it because i mean and and i know we all remember because it was just a few years ago when prices just skyrocketed up.

Remember that? Yeah. And there were some hot areas that were significantly overpriced. And they did kind of come down. And, you know, even last year was kind of just like, you know, correction. Austin, Texas was one. Like we saw some markets do that. But I remember being on the show, you know years ago and and dave and all of us

were saying there's not a big bubble you guys because some people were saying that yeah yeah it's just like it's gonna be like oh nine and there's gonna be foreclosures everywhere and all of this and it's like no it is gonna it's gonna stay and again it may correct you may kind of go back down a little bit to correct but it is going to be what it is and it has stayed there jade i mean it is wild i'm not mad at it now as has stayed there, Jade. I mean, it is wild. I'm not mad at it. I'm not. I mean, think about it because this is the thing. Like if you're on the sidelines right now, you're definitely on feeling some type of way because you're like, man, I wanted to get in on the market. But it's good news for all of us because it tells us that the market is still strong and that things are doing well. And when you do get in,

you're going to want your property to appreciate as well. That's right. I mean, Sam and I, South Florida was one of those hot areas. And when we got our first house was around 400,000 and it doubled when we, I'm like, thank you. It made me a baby steps millionaire. Like, this is what we want to happen. And so it's one of those things that when you're not in the housing market yet, it can feel so frustrating. But once you get in, you're like, yes, like I'm finally part of it and you want to see it ticking up. And so that's right. Yeah. Good things. So good. Did we tell him to go to the. Oh, no. Yeah.

You need to go to Ramsey Solutions dot com slash real estate. And we do have a U.s housing trend market trends it's it's honestly right there on the on the front uh home screen so if you're curious about what's going on in the real estate market and you want to see facts and we pull these from reputable sources this isn't just opinions out there these are actually what's going on in the housing market and it is something people are watching and want to know hey what is going on because you do hear a lot of either doom and gloom or overhyped here i mean so just to get the reality of what's really going on in the housing market make sure to go to ramsey solutions.com real estate and for all of your real estate needs if you are looking to buy and sell use one of our

ramsey trusted real estate agents because yeah they they will help you in this area and it's a big deal you guys your house is for most people, the largest purchase you make. Oh yeah. And to your point, the largest investment when it comes to it, appreciating and all of that. So, and they help you do it the Ramsey way. Cause you know, when we were moving here you know, the way we do things Ramsey way is not necessarily the way they do things out in the world. And so it's like, I remember making an offer on a house here and I was like, it's gotta be contingent. Like we've got to sell that house so that we have like, we're not going to be one of those people who takes out a bridge loan. And it's great to work with a Ramsey trusted person because they know that. You don't have to explain all that to them.

They get it. They're not going to take the task on it. Exactly. So it's so, so important to do things the Ramsey way. Okay. Let's get to a call. Nick and Diana, they're in Chicago, Illinois. What's going on? I love a couple now. Hey, how you doing? Doing good. Thanks for having me on your show. You're welcome. My wife is a longtime listener and I just became started to listen to you guys and i wanted to ask a couple of questions uh in regards to i co-signed on a loan for my friend um seven years ago now and with a verbal agreement that in a few years he's gonna refinance and get me off um and um you know covet uh hit and he had a COVID assist program where they stopped paying on the loan. But obviously the interest rates were continuing to add up.

Yikes. And then life happened. So he had surgery. So he went through a couple of rough times. I mean, the good thing is he's still paying on the loan. The only bad thing was the original loan was for $367,000. And now because of the COVID program, it went up to $376,000. So after I just got married with my wife and we want to start our life and buy our first home. And I reached out to him in regards to options of getting off the loan excuse me

and we tried to do a loan assumption but his death ratio was not where it needed to be because of you know the surgeries and everything so and then I approached him in regards to hey you know let's refinance. Even though it's going to be at a higher rate, it's going to be on you only. It's not on me anymore. I did my part as a friend of helping you get this house. And what did he say? No, obviously he said no because of the rates not being low enough. And so my question for you would be, obviously, we've been going back and forth with him about it.

And I want to know what should be my next step. I mean, the relationship can't be too good after all this, is it? So no. So the relationship has definitely suffered and... Yeah. We're about to go to a hard break, Nick. But, yeah, I mean, this is the hard thing about co-signing, Nick, is there's not... There aren't other options. I'm like, there's... From a legal

perspective, you signed a loan. Yeah. And until your name is off of that loan, there's really not, like, a legal way to go about this or anything. I mean, it kind of is what it is and so you could try to see what a judge would say about it i mean to try to force force a refi but i don't know that they could do that yeah i'm not sure this is why we say not to do this yeah this is the ramsey show

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because we care about what you think. And we care about that so much that we do an annual Ramsey Show listener survey. And it's just where we find out from you guys. So that survey is now live. We want to know your favorite parts of the show. We want know what you like what you don't like uh what you want to hear more about whatever it is we want to hear from you i just beg of you be kind like don't comment about like my hair or i don't know something weird our clothes unless they're kids clothes you can comment about kids um but there are two simple ways that you can comment about Kins. But there are two simple ways that you can participate. You can either text the word survey to 33789, or you can visit ramseysolutions.com slash survey. Or if

you're listening on podcasts or YouTube, you can click the link in the description and do it like that. But sign up today and you could win a $500 gift card. Amazing. It's nice. Jade, I want to wrap back to the call we just sent yes because it was a quick um a quick call but i think a big subject uh and obviously nick and diana there were a couple and they called in and talking about how they had how he had co-signed for a friend on a home yeah um that was 367 000 and then with the pandemic happening and all these other plans you could get on where you didn't have to pay and you know all of this stuff happened and now he owes 376 thousand dollars so nothing was paid down it was going up and on top of that um you know nick

got married and was like i kind of i want off this loan because when you co-sign and everyone needs to hear this this is a lesson when you co-sign it basically is you taking on this person's debt it shows up like your debt i mean they're like the parents if it were just you yes so that is car loans you guys that is mortgages that is parent plus loans we talked about that in the break if you're a parent and you do a parent plus loan that is debt that's looking like it's going on your report. Like this is it is a really big deal. And people do this out of, you know, the goodness of their heart because their friend or family member can't get the loans. They need someone to co-sign. And and that's where people get in trouble. And the hard thing about when you co-sign

is, I mean, there's not a lot of ways to get out of it unless the person who is the main, the main name on the loan says, I will refinance to take you off, which Nick in the last call tried and asked the friend to do that. But the friend won't because now interest rates, right? He probably got a 2.5% interest rate and now interest rates are 6%. So the friend's like, there's no way I'm going to, I'm going to refinance right now um and yeah and it and it messes up a relationship and it messes up your own financial life so so again we were we were saying before the break that there's again i mean the answer to those questions if you have co-signed there's really not much you can do from a legal perspective you may be able to get a judge to force it but the force of refinance but i don't hear that of

that happening a lot do you jay i don't i mean we had somebody call in a couple of weeks ago it was a boyfriend girlfriend signed together on the vehicle that she would drive they're no longer together and he's like she's not paying the bill like what do i do and the only thing i could advise them is you know find out you know how much is owed and kind of keep that to the side because you might be ending up on the hook for this. That's, that is the danger, Rachel, that we talk about all the time, whether it be with housing, whether it be, I mean, this, this is the price of a house. And so because of it, to not be able to do what you want to do next, you've really got to think long-term because the truth is, you know, with the call that you just talked about, the guy, he's not, he's not a bad guy. The friend. Yeah.

The friend is not a bad guy. He was making payments. He, something health happened with his health, like life happens and you, there's no way we can have the foresight to understand what will happen with the housing market. What will happen with interest rates? What will happen with your health? Will the, the relationship sustain? You don't know. Yeah, exactly. You just don't know. And this is so sad. I was telling Rachel during the break, with my husband and I, we experienced this because it's always out of the goodness of somebody's heart, always.

And with student loans, my mother-in-law signed student loans for obviously her son, which you would think, oh, duh, of course she would do that. But the truth is now it was on her credit as well. And that's part of her debt to income ratio. And when she was ready to buy a house, then we were affecting her because we still had that wasn't something that was in our debt snowball yet. So you can see how it's not that

somebody's the villain or doing something bad. It's just when you co-sign, I mean, it's why the Bible says that it's, I mean, really in simple terms, it says it's stupid to co-sign. Yes, you're a fool. You're a fool to do it because it puts you in a situation that you have zero control over virtually. That's right. Yeah. So I didn't want to go past that call too quickly because it's a big one. I know for Nick and Dan, this is their reality. But also, I mean, the answer is really, I mean, there's really not much you can do.

All he can do is save up to try to pay cash and lower that debt to income ratio for his own loan for his own home loan. That's truly all he can do. Control what you can control. But at that point it is there. Yep. Yeah. Oh, so tough, Rachel. So sorry, you guys. That's not fun. Yeah. All right. Learn from their mistakes and from my mistakes. And Rachel, you have some in there too, I'm sure. All right, Jeff, we've got Jeff in Austin, Texas.

What's going on, Jeff? Good to have you on the show. Well, I'm pleasured to be on the call. I've been listening to Dave and you ladies for probably 20 years. Oh, wow.

Before us then Jeff, before we were co-hosts. So that's great. Thanks for calling in. Yep. Listening and, uh, have been a,

uh, been a student and, and followed Dave's principles pretty well. So, you know, I'm pretty happy today. I've got a lot of peace and contentment, a lot of blessings in my life. And that kind of leads me to the call today. So a little back story. So I live, I'm retired about two years ago. And, you know, I've done well in the market.

I've been in business for 30 years. And the situation I have is on behalf of my daughter. So my daughter has been married for two years. And I have a beautiful family. I have two little babies. And my son-in-law, very bright, intelligent young man, my daughter's very strong-willed and independent, is some of the principles that are laid out, you know, they haven't followed to it, the combining, you know, finances, et cetera, is one of them, which I was always very vocal. I kind of taught my daughter baby steps.

And so she's been a disciple. She's getting there. She's got an IRA. She's got her emergency fund. She follows a very strict budget, but then not having joint finances, we just found out this week. My son-in-law came to confession to all of us and had been day trading and essentially was financing some of this through credit cards. And he stacked up about $60,000 in debt and lost all of his savings day trading.

And so that number doesn't scare me so much because I'm confident that they can work their way through their debt. The part that I'm struggling with as a father and a grandfather is I'm trying to stay in my lane to give my daughter as much support as I can. She's never asked anything from me since she's graduated from college. She does well at her job. In fact, she starts back to work from maternity leave this coming Monday. Oh, wow, so new baby. Yeah, born in October. Beautiful little girl.

So the challenge is, for her and for me, is all of this was hidden. She had no idea until she stumbled across some information looking at her credit score that had dropped and found out that one of her cards, he had used and stacked and maxed that out and that's how she found out and got it so if the truck so he used her card without her knowing it so they they are very the best way i can put it their family's very close as far as the kids they don't do anything other than take care of the kids and activities or great parents.

And unbeknownst to her, yeah, he used her card, and they do that. They might use each other's cards at times. But then he maxed it out, and when her credit score dropped by 20 points, she started digging. You said he came clean to the whole family. So that was after she had gone to him and said, hey, what, this is,

what is this? And I obviously, after they talked, then he felt the need to kind of say that to the whole family. Is that what you're saying? Yes. So he, he can, he confessed to her. And then the day after called me because again, we're very close. I mean, we talk consistently. I talk to my daughter or text almost every day every FaceTime So this is Man this is really difficult and So for them it's going to take a lot Of I think professional counseling Because this is lying I mean he absolutely

Lied and did a level of gambling is kind of what Day trading can end up being So for you I think being a dad there Not overstepping your bounds this is their Issues to work out within their marriage And if they reach out for help, I think from an emotional standpoint, you're,

you can be there, but this is theirs to take care of. Don't meddle too deeply or it's actually going to make it worse. I think they need to figure this out between themselves as a couple. Sorry. This is the Ramsey show. From the Ramsey network. It's the Ramsey show.

I'm Jade Warshaw. Next to me is my buddy and co-host, Rachel Cruz. We're taking your calls this hour, although you're listening in the app, and I'm glad you're here. The show is still live, so still call in with your questions, and we'll do our best to point you in the right direction. The number is still 888-825-5225, and we'll get you on the line. All right, Rachel, you ready to get involved? Let's do it. Okay, Bonnie, Harrisburg, Pennsylvania is up next. What's going on, Bonnie? Hi there. Thanks so much for taking my call. Yeah. How can we help?

I'll just go in a little tiny bit of background. I'm 62 years old. I've been married for 43 years. God bless my husband and i with 11 amazing children 11 well done bonnie yeah well god's good but um uh sadly though my husband and i are going through a divorce i'm sorry and um anyway uh the children have been great um They're all successful, married. I'm right now, I'm living with my one of my sons. There were some, I mean, without making my husband sound like a horrible person, there was there was some abuse. And a his upbringing, it was very abusive. And, you know, a lot of things happened over the years. And so.

Yeah, you don't have to make excuses, Bonnie. You're brave. I mean, honestly, to get out of a situation like that, a lot of women don't. And so I'm very proud of you for doing that. That's extremely, extremely difficult. Well, thank you. I tell you, it's actually my third time. The first two times I left and it was very, very difficult.

And then this last time I had determined I was going to stay because my children were all adults by then. And I just thought, you know what, I'll, I'll, I'll deal with it. It was a lot of emotional and, um, just, just a lot. Yeah. A lot of some financial on that, but anyway, with their, they were concerned and, um, I took the plunge and moved out. My son offered me a place to live. So we're going through litigation right now for a divorce. And I have some credit card debt. I, we have a small farm that we own and that's going to be all divided. And I'm just concerned what direction I should take when everything is settled. Like, I know nothing about like investments or anything like that. I don't want to mess anything up. I know I do need to

get a vehicle. I have some credit card debt. I've got to get that wiped out. And should I rent? Should I buy? Should, you know. For sure. Okay, so when everything is settled, which we won't really know exactly the terms until it happens, but if you were to guess, do you know what it's going to look like? If you guys divide the farm up evenly, if you divide assets evenly, what will you end up with? Ballpark. I'm hopeful it might be maybe $300,000, $400,000.

Okay. So I've never had that amount of money. I was a stay at home mom, homeschool my kids, you know. Yeah, totally. He took care of, you know, pretty much all the assets. How much credit card debt? No, you're good. How much credit card debt do you have? About 12 grand. 12 grand. Okay. And are you working right now at all? I teach preschool and I do some and I'm collecting Social Security. Okay. So how much are you bringing home a month? Probably about, I'm going to say about 2,000.

2,000. Okay. That's great so um yeah i'll jump in with my thoughts and then jade i would love to know you know what you think but i think honestly based uh the basics for you bonnie i think are going to be big and those would be in my head learning how to budget and we're going to give you a ton of stuff after this call so don't don't be too overwhelmed because we have some tools to really walk you through probably more in detail than we can on this call, but to learn how to budget. So I want you to be able to be very specific and feel in control of your income because that's going to give you power. When you don't know how to do something or something's

always been done for you and it's your first time, it's very scary. There's a lot of questions and all of that. But once you actually start implementing this and doing it, you're going to feel very confident very quickly. And I want that for you. I want you to feel this power of confidence that, yeah, I can do this. I can get my $2,000 a month and I know exactly where it's going. There's no questions. It is here, laid out. I feel good about that. So that's going to be one. And the second big thing, Bonnie, would be, you said a car. So that's going to be something I would look into. And then the housing. So housing, what I would say is I would use some of this money. And I would put a down payment and get your housing where you buy because for you and your age renting, you know, over time, it's going to continue to go up. And it's going to be the one place in your budget that will continue

to increase throughout the years. And I want that under control. And so this could be something, Bonnie, too, you sound, I'm going to say you're low maintenance because you have 11 kids. And if you're a mom of 11 kids, you have to be a low maintenance person. So again, it's nothing extravagant, right? It's going to be just you. So this could be a condo, right? I mean, this doesn't have to be, this could be a townhome or a single family home. But it's just something that you can get into, lock in a rate so you know what your mortgage payment's going to be. And you're eventually going to end up paying that off. And you're going to have a home that's paid for, somewhere to live for the rest of your life. So I feel like those three things, which again are big, but it's the budget, getting the

car, and then next looking for the house. And with this, after the settlement and you get that 400, that's going to be, you're going to have the ability to do some of that and then also invest. I agree. Go ahead. I'm sorry. So you think, because that was one thing I kind of grappled with. Do I rent? You know, because I hate the idea of just putting that money.

I wouldn't. I wouldn't. I wouldn't at your stage because you have a stable job. You are location-wise probably where you're going to be, right? I wouldn't at your stage because you have a stable job you are location wise probably where you're going to be right I'd say for your life it's not like you're wanting to move to a new city unless you do I mean but it feels like all your kids are there so and you know the area you've been living there for a while you know the area um so all of those big questions um are there but and you don't have to pay for it all in full right because you're going to want

some in investments yeah you you do need some and that's all I was going to say is the idea that $400,000 may be more than you've ever seen, but if not handled the right way, it's not going to do what you need it to do. And so in this situation, I wouldn't take a huge chunk of it and buy something outright. I like Rachel's point because you're still stabilizing it. Even if you're putting down a nice down payment and you have a payment, it's still stabilized in that way. And you could still drop a very decent chunk into investing, which is something that I think is going to also be important. I mean, maybe add it to number four, Rachel, on your list of really digging in and let somebody teach you about how this money is going to be invested and what investments you might choose so that it's not somebody just telling you what to do. I would suggest going to ramseysolutions.com and finding

a smart investor and really in the meantime, start trying to educate yourself and go, okay, what does it look like to invest this money? We would tell you to invest it across four different types, right? 25% into each one. But I want you to understand that and feel empowered. I could understand how after, you know, 40 some odd years of being married, being, you know, your mental space is taken up with these kids. You probably haven't had much time to think about what we're talking about today. And I want you to be with somebody who can educate you and help you learn. So you feel really good and confident about how this money is invested. So we're going to give you every dollar premium. And then Kelly's also going to help hook you up with a financial coach for an hour, just to get an hour session. Because honestly, within an hour, Bonnie, I think they can help

untangle some of this and get you on the right path. And then also on the investment side, they'll be able to contact a smart investor pro for you to be able to really dig into that investment side. But I just want you to know you can do this. We're proud of you. You're strong. And really, I mean, the future is bright for you, Bonnie. Thanks for the call. This is The Ramsey Show.

Hello, you're listening to The Ramsey Show. Happy that you're here with us. I'm Jade Warshaw. Next to me is Rachel Cruz. Taking your calls for the rest of this hour about your life and your money, your financial situation, your budget, your spouse. Maybe it's there. Maybe they're the problem. Maybe you're the problem. Whatever it is. Maybe you think they're the problem, but call in. If everybody else is the problem, that means you're the problem. Just talking. All right. Let's take some calls. Jim, he is in the city I was born Spokane Washington what's going on Jim hey

my wife and I were blessed this Christmas we were given the $17,000 in gold and silver coins. Oh. From who? From my in-laws. It was kind of part of an early inheritance from them. And I just don't know what to do with it. Do I just hold on to it, put it in a safety deposit box? I don't know what to do. Could you cash it out and put it in a different type of investment, a better investment?

Yeah, that's what I'm trying to figure out is what option I can do with that. Should I cash it out, put it into like a money market fund? How old are you guys, Jim? I'm 44. 44. And my wife is 46. Okay. And financially, where are you guys at?

Do you guys have debt? Do you have savings? We have No debt except our house And we have about Three month emergency Fund Good job So what we usually find Jim

Is that especially when it comes to gold And silver those kind of commodities or any other commodity they are they fluctuate so much and they usually end up going up and down depending on the fear of the world so when people are really scared the values shoot up because everyone thinks you know if the economy crashes at least we have gold and silver yeah but then if the if everything's going great and everyone's thriving they they're not worth a lot. And so this idea that it fluctuates so much is not a great place to be in an investment. And then when you actually average it all out, you can do and make so much more money

if it was just invested in the market, right? You could even just get a index fund and put $17,000 in there, and it's going to be more. Because it is a fear-based investment. Because a lot of people believe that if something were to happen at the end of the day, and we go into a Great Depression, at least they have gold. But always my argument, which I'm the conspiracy theorist of the show. So just so everyone knows, if someone were to buy gold, it probably would be me out of all the end of the world i'm not going to because that's my point even if i don't right i'm not going to because the truth is if something were to happen and there's a movie out called homestead right

now but like if something were to happen people aren't looking for gold like they're truly looking for cold water water yeah they are they're looking for food um they're looking for a knife hunting supplies to get i mean seriously they're like if like if the grid goes down and there's no refrigeration or anything like i'm coming to your house my home said that i have i don't i wish i did but the point is is that people aren't trading gold at that point they don't care about gold really if the end of the world happens they are caring about food and water right and safety like that that's it so watch your back so it's such a fear-based um you know idea and this lie of like oh well at least we'll have gold

like that's not that's not something that's going to be even traded in some like armageddon type setting so all that to say jim you're going to get a better rate of return if you put your money into the market so that can be in a mutual fund an index fund is great uh you know even simple things you can go to vanguard just open up a vanguard account and put some money into the market. So that can be in a mutual fund. An index fund is great. Even simple things. You can go to Vanguard. Just open up a Vanguard account and put some money in. I mean, something like that. If you guys need this money in the next four to five years, I don't know if you have kids and maybe college or maybe you guys are wanting to pay down the house. Yeah, that's great. Then use it in that way, which could be great. And you may want to put it just in a money market account or a high yield savings account

just to have it liquid. But from an investment standpoint, I would not keep it in any type of commodity, which would include this level of investment. So Rachel, the apocalypse happens tomorrow. You first get that inkling like it's all over. Like you see a zombie or you see an alien. The scariest one is, and I'm going to not pronounce it right. The guys in the booth may know better than me.

The EMP, the battery, right? It all, if all the batteries shut down. What's your first move? Well, Winston and I have a plan of where we're going to meet up. That's the other thing. How do you get in touch with people? If you don't have your cell phone. That's a good point. Your kids aren't, my kids are in school. My kids are in two different schools right now. So tell us, tell us what we're going to meet up because that's the other thing how do you get in touch with people if you don't have your cell phone that's a good point your kids are my kids are

in school my kids are in two different schools right now so tell us all this tell us what we all need to know well Winston and I first are gonna are gonna get to the house okay you meet about the house and you know we did have a plan differently um which each of us go get a child depending on the school which that probably needs to be it like if I could run to my kids first um yeah and then and then you gotta you gotta go find land you gotta start doing your land you have a bunker don't you no i wish i did i wish i did if she did she wouldn't tell everybody on the air about it that's right come up to my house and be like we need into the cruises rachel and i will talk after this segment but anyway hey listen a

bow a bow and arrow you know it goes a long way go a long way, if you know what I mean. I'm just saying. Oh, my gosh. Fun times. But then also, Ken Coleman, this is so off topic, Ken always says if the end of the world happens, he just wants to be on a beach. That's my first move. With a good drink. And he's like, just let the tidal wave, let the deep impact movie, you know, the tidal

wave, like, just let it just hit me and I'm out. I'm going to go to Fort Lauderdale and hop on somebody's yacht and just take it out to sea. And we're good. That's it. Oh, my gosh. Okay, we need to take a call. Stacey is in Atlanta, Georgia.

What's going on, Stacey? My problems don't sound so bad compared to the world ending. That's right. We're keeping it light here on The Ramsey Show. How can we help you? Well, I need you to talk me into doing what Dave would say I need to do. And that is I've got two rental properties that are completely paid for, but my house that I live in is not.

I've got no other debt besides our mortgage. But if I sell these rental properties, I'm going to have to pay capital gains taxes of $90,000. And I just, I can't, I can't get myself to agree that that's what I should do. How much do you have left on your mortgage? About $730,000. Oh, okay. Yeah. Do you enjoy the rental properties? Like, do you enjoy investment, do you enjoy real estate investment? I think kind of, but I think I'm more looking at that as a, you know, I'll enjoy it in the future when I'm retired.

Okay. Well, what will you enjoy about it more when you're retired? Just because you'll still deal with tenants and everything. Yeah. You know, finding a new tenant is the least favorite part of it, but my husband's really handy. We do all the repairs ourselves and all, but when we're, you know, busy in our own lives, that's not so fun. Okay. I gotcha. How, how, how old are you both? Are you still working? What do you do? What do you make? Tell us more

about that part. I'm 45 and my husband's 56. Yeah, I work full time. He works part time. What do you guys bring in every month or yearly? Yearly without the rental income, we're at about $200,000. Okay. And with the rental income, what is it? That brings in another $40,000. Okay. so you're making $240,000 a year. Is there, I guess what I'm saying is, do you have any other debt or that's just it, the main residence? That's it. Interesting. I mean, there's part of this where if you wanted to just pay off your main house, it would take a while. Or if you've sold one property and not both, maybe you'd get out and just say, okay, we're going to pay it down using one property and then the rest we're going to cash flow. How much are they worth? Yeah. How

much is each property worth? Each of the properties are worth about $350,000, so $700,000 together. Oh. And, you know, we don't plan on keeping this house after we retire. This is, you know, the lake house while the kids are young and all of those fun things. So we plan to downsize and pay cash once we retire. So, you know, I wonder about this because the best move to pay it off. I don't know, because after you after you they'll bring 700. But after fees, after capital gains, it's not going to be enough to pay off your main mortgage. Right. Anyway, it'll take me another year or two to pay it off. And if you know you're going to downsize,

I don't feel like there's a huge rush here. You're not strapped for cash. I feel like part of this might be waiting to see, okay, if we say we're going to downsize, what does that look like? Can we save up in the meantime to make that happen and pay mostly cash for that when the time comes? I don't know, Rachel.

There's nothing here that makes me think that they've got to make this decision today or tomorrow or even this year. Yeah, nothing's on fire. No, not at all. But I think it's more of just the weight of not having, you have two huge assets and debt. And if you want the debt relieved, the assets are going to be the way to do it. And then, but that's, yeah, I mean, up to you guys. And if you just want to get like a quick hit on it, just sell one. And again, you have to love real estate to do this. That's why I asked in the first place. If it's a pain in the butt and you guys are going to want out in 10 years anyways, then I'd sell them and keep moving forward with a different investment plan. Good stuff. This is The Ramsey Show.

You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me is my buddy, Rachel Cruz, talking about your money questions. And you know, out of all the topics that we get here on the show, a lot of people have still have questions around investing. It's one of those topics that feels a little bit intimidating, but you're afraid to ask your questions because maybe you feel like you should already know. And there's just a lot of nuance behind it. And so we've created a guide to investing. So if you're interested in this, we have a Ramsey's Complete Guide to Investing. It can teach you everything you need to know to invest with confidence, which is so, so good. Whether you're a beginner or looking for next level strategies, this is the tool for you. You can go to ramseysolutions.com

slash invest to get your free guide. Or if you're listening on YouTube or podcast, just click that link in the description. And guys, it's so important because I have found, and maybe it's just me, but I don't think it is, when you're hearing these concepts for the first time, it doesn't stick all the way. Like you need to hear it over and over. I know, I'm sure many of you listening, if you did Financial Peace University, or maybe you've been to one of our live events or live streams, you hear the concepts and you're like, okay, I got it. And then a couple months later, you're like, wait, what was it again?

Yes. I was sitting down with our financial advisor when we first got married and I was like, okay, I need you to explain A, B, and C one more time. And so ask them because it is, to your point, it's true. And there's this jargon in that world too. And you're like, B, and C one more time. And so ask them because it is, to your point, it's true. There's like, and there's this jargon in that world too. And you're like, okay, I need to know like the acronyms and all, you know what I mean? There's just so much. There's so much.

Yeah, so you're not alone. Don't think that you need special help or something. This is what all of us go through. Even the people who host the show, you gotta learn it and it takes something to learn it. So check out this guide, Ramsey's Complete Guide to Investing, RamseySolutions.com slash invest. OK, Deja is in Washington, Washington, D.C. I almost said Tennessee. I don't know why that is. All right, Deja, what's up? I jacked your home state.

Hi, Rachel. Hello. OK, how are you ladies today? We're doing good. How can we help? Good, good. I am calling because my husband and I are wondering, given the amount of debt that we are in, if we should take the opportunity to sell our current home in Maryland and buy my dad's home in North Carolina. Interesting. So how much debt are you in? We are currently in, the amount of debt is $105,000.

Okay. And what kind of debt is it? It is a mix between credit card debt, student loan debt, one car, and a loan to my father. Okay. And you both have jobs in D.C.? Are you just mobile that you can move to North Carolina? So no, so we both have jobs in DC. He works in audio visual, which he's currently remote, but he's going back to the office here pretty soon. I do have a job where I do work remote that I do think will, I can transfer to North Carolina perfectly fine. Cause I only come, I'll probably go in maybe once a month, which should be no problem. But his income is the bulk of our income. So that is a concern for us as well.

And what would cause you to buy your dad's house in North Carolina? Is he giving you like some crazy deal or you love the house? Tell me more about that. Both. So, um, oddly enough, so he's given us a crazy deal on the house, but we actually found out that we are expecting. We found out. Congratulations. Thank you.

Thank you. Um, we found out on New Year's Eve that we are expecting. Um, and just by the grace of God, my dad called us the next day and was like, Hey, would you all like to buy my house? Because I'm moving. Um, and I don't want to sell it to you all at market rate. I just want you all to buy it at the appraised value. And it will be an additional bedroom, which now we know we need. Yeah, it just literally happened within 24 hours. How much is the house?

Because that doesn't feel too different. I'll say that again. I'm sorry. I don't know why, but it doesn't feel like it's going to be that crazy of a deal, appraised rate versus market value. So what is he saying, the prices? Yeah, so the price that he's offering his home for is $281,000. There's a three-bedroom, two-and-a-half bath. Okay, so let's walk through this math and figure this out.

So you sell your current house, and what do you take away? I estimate we will take away about 60 to 70K. Okay. Which would not be enough to clear your $105,000 of debt. Do you guys have any savings, Deja? We do not have any savings. We are on baby step two. So we have 1,500 saved up right now. I can't see it. I'm not going to lie to you I the math doesn't work for me and it feels I'm just gonna I'm gonna shoot you straight it feels like an opportunity came and you were feeling some type of way and you're like yes this is our way out and I don't see it because

the truth is you sell this house let's say you get 60 for it um let's say you get $60,000 for it. Let's say you take away $60,000. And is that after fees? Yes. We were estimating realtor fees and then probably, you know, helping with closing costs and things of that nature. Deja, can I just shoot you straight, girl? Y'all are broke. I mean, you got $105,000 of debt. You have some equity in a home. But, like, you guys don't have any money to buy a house. I mean, you really don't have any money to buy a house I mean you really you really don't and I just feel like this house which is so hard to say especially when it comes from a family member then you add on

the emotional ties and you're pregnant which I'm so excited for you and then that adds on a motherly nesting element like there's I see how like all of this feels like it's all working in your favor and that's the problem is sometimes our emotions can drive it but when you call us and we don't know you and we're just looking at math yeah um it doesn't i know i don't i think it's going to end up being more of a curse than a blessing because what ends up happening and this is not to be debbie downer i'm more of a glass half full kind of gal but truly you go into the house, the hot water heater breaks. Yeah. And then the heating and air goes out and then the yard maintenance. And then, I mean, like stuff that the mortgage payment is, that's the low end of it, right? It's everything else on top of that,

the homeownership that's just so expensive. And you guys don't have any savings. Like you don't have any margin. That's what I'm saying. To do that. Nothing changes. Literally nothing changes. You get the $60,000 from the sale of your house. That's literally your down payment on this next house. So you still have $105,000 of debt and a house now. So what was even at that point? I'm like, well, what was even the point of going to North Carolina? Truly? Yeah. Yeah. No, that is great perspective. And that's one thing that we, you know, kind of talked about. And one of our concerns that we put it to him was like,

Hey, like we wouldn't even have the money to, we sell our house. We wouldn't have the money to go to close on the next house. Yeah. Um, how much do you guys make a year? I'm sorry.

How much do you guys make a year together? I'll come. Yes. Combined 120 K. Okay. Great. Great. Great income.

Yeah. Were you look, let's pretend that granddad never called or your dad never called. Yes, combined $120,000. Okay. Great income. Yeah. Let's pretend that granddad never called or your dad never called. Were you guys trying to get out of North Carolina to begin with? Or I'm sorry, trying to get out of D.C. to begin with? We were open to it because it's just so much cheaper. Like for us to just have an additional bedroom because we currently live in a two-bedroom. So for us to move to another, like a single-family home with, you know, three beds, you know, an equal, all things equal type of house in our area would literally be $500,000.

Sure. We just wouldn't have been able to afford to do that. Were y'all going to want to move anyways, do you think? Do you think you'd want to move away from D.C. anyways? Yes. That was an option we were considering was going back Was going down south We were considering it But it's not like out of the blue or anything

Gotcha, okay So yeah, what I would do honestly is You're pregnant and so we always say To kind of go in stork mode is what we call it So I want you guys just to save Save, save, save, save, okay And then baby comes and if you're good, is this your first baby? Is this your first kid? Or do you guys have

other children? It is. We actually just got married in November. Okay. So nice. Well done, girl. Okay. Down to business. That's right. So, so what I would do is I would, I would save, cause you guys have no savings right now, as much as you can. I mean, like full on, like we are going to save as much as we can. And then when you come home, baby comes home, everyone's good. You're going to take that savings. Because what would you say you guys could save per month right now if you really, really cut down expenses? Do you think you could save $500 a month?

Oh, yeah. I think we could do a bit more than that. Just based on how much we're throwing towards debt, if we were to bring that down to just making the minimum, we could probably save about $2,000 a month. Oh, amazing. So I would do that. Put a bunch of money to the side and then when you guys when you're done and

you're back and everything, you'll have around $16,000 then start knocking off your debt, smallest to largest. I wouldn't make any big moves right now. I would stay put. You're going to be exhausted bringing home the baby. I would continue to pay down that debt. I would get a big emergency fund and then save up

a down payment and then decide alright, let's change our lifestyle. Which may be in 18 months, Deja. It may be a little while and that's okay. I love the idea of going somewhere where the cost of living is less expensive. But to Rachel's point, Deja. I mean, it may be a little while and that's okay. I love the idea of going somewhere where the cost of living is less expensive. But to Rachel's point, when the time is right, this is The Ramsey Show.

This is The Ramsey Show. I'm Jade Warshaw. Next to me, Rachel Cruz. Our scripture and quote of the day, Nahum 1.7, it says, the Lord is good, a refuge in times of trouble. He cares for those who trust in him. Sarah Blakely said, It's important to be willing to make mistakes. The worst thing that can happen is you become memorable.

What about that? There you go. You're a legend. She created Spanx. Yeah. Is that her? Sarah Blakely. I'm almost positive.

I think that, yes. It's miraculous. Well done. We love her. Glad you her? Sarah Blakely. I'm almost positive. I think that, yes. It's miraculous. Yeah. Well done. We love her. Glad you were born, Sarah. Yes, we needed that. All right.

Michael in Fargo, North Dakota. What's up, Michael? Oh, not much. How are you guys doing? Doing good. How can we help today? Well, I'm kind of at a crossroads. It keeps me up at night.

I'm 45. I've got 7,000 in retirement. Sorry, how much in retirement? I have about 7,000. Okay. I make about 64 now, 6,000 a year, and I have 48,000 in student loans. Going over the numbers, I want to hit about 2.5, 3 mil by 70.

But I'm worried that I'm not going to make it. Make it? That goal is what you're saying? By 70? Yeah. Okay. Yeah, correct. Are you married?

Do you have a family? Or is it just you? Oh, I'm married. correct uh are you are you married do you have a family or is it just you oh i'm married okay uh do you have any kids uh i don't but my wife does okay but they're grown in all of the house okay okay um is the 64 000 is that a combined income of the household or is that just what you're bringing in that's just what i'm bringing in. Does she work? Yes. What does she make? She makes a little bit more than me, around about $80. Okay. And are you guys working together on this? Are you guys looking at this goal for you guys as a household and a married couple,

or do you guys have your own separate goals? Separate for right now. Okay. How long have you been married? Ten years. Okay. does she have any debt uh just the house just the house okay um yeah so michael i would um yeah if i were you guys i i think a big starting point is to see yourselves as a team in this. Because when you retire, it's not just you retiring, right? I mean, there's someone in the household that is. And when you guys start seeing yourselves as one, right?

One income coming in, one retirement accounts that we're shooting towards this number together, there's a lot more progress that can be made. And not just from a financial perspective, but also just from an emotional marriage perspective that you guys, you know, are doing this so unified and trust each other on a really deep level. Yeah, because the truth is, if you do what Rachel says, and you guys get on the same page, there's no reason that you can't accomplish your goal. I'm just sitting here trying to run the numbers real quick. And you've got 7,000 saved now. You're 45. You say, okay, by the time I'm 70, I want 2 million. Well, if you and your wife work together, you pay off the 48,000 in student loans. Is there any other debt we should know about? Consumer debt?

No. On my end, the student loans is all I had. What about her? Not just her house, but I know that when I first started listening, which was back in 2019, I was probably about $150,000 in debt. Oh, wow. On my credit card. You've worked your way down. Yeah, I've worked really hard on it. And if you work together, I mean, with you guys' income mean with you guys's income you can do this in like nine months yes and then after that you're investing 15 which is about 1800 a month and i just did the calculation really quickly yeah by the time you're 70 you should have 2.4 with 144 000 income yeah yeah that's how this works so what you're shooting

for is 100 in the realm of possibility. And that's with no one's income going up in the next 10 to 15 years, which it will. So you guys will hit it even sooner. What does that make you feel when I tell you that? It makes me feel hopeful. That's for sure. Yeah. But the key to this is what Rachel said is this is both of your incomes working together,

not just to build the wealth, but to pay off the debt. And I want to say that clearly. You know, when we talk about combining money, a lot of times the guilt that we feel is, oh, well, I have debt or, oh, you know, my debt, my debt. But you're truly when you do this, it's you're all in. So the hard parts you share, but then also the wins and the really joyful parts you share as well. So you guys will work together. You'll feel great about tackling this debt. Nothing brings a couple together like rallying around a goal that's difficult and actually accomplishing it. And then you go on to build this life together that you want. And yeah, the house payoff, that stuff will come on down the line. But yeah, is there a reason, Michael,

you guys haven't combined in the last 10 years? If you've been listening since 19, you know that that's like one thing we're big fans of. Have you guys talked about it? And is it a point of tension? Yeah, it's in her past. She's been burned a few times. So I just respect her wishes on that. And then my question is, the question I'd want to ask in this relationship, tell me again how long you've been married.

Ten years. Ten years. My question for her would be, at what point do I earn your trust? Because, and I would say, I'm a therapist, but the way you build trust is seeing the pattern in someone's life. And Michael, you've worked your way down from 100 and what was it? Would you say 150,000? Yeah. Yeah, all the way down to 48,000. Over a decade.

So the pattern is showing positive momentum, right? I mean, the right way. And I understand you want to respect her wishes wishes but I would also say the points in marriage that of the things that we don't want to talk about or push on because they're kind of sensitive are the things we need to push on because that's what honestly creates a level of depth and intimacy and oneness and and again you've probably heard them on the show because you've been listening for a while but we have couples on the stage that come and they do their debt-free scream and and they say for the first time we combined it all and like and and and and doing this goal

together like our marriage is like there's something about married couples coming together and where money is not the thing that separates them it's the thing that actually unites them and there i don't know there's something great to that and i understand that yeah i think that is hard if there's a second marriage and they were burned in the past. I totally get it. But it's been but also it's been a decade and you, to your credit, have proven a really healthy pattern when it comes to money. And so I do I don't think that it's your response or I don't think it's, you know, unreasonable for you to sit down and kind of push about this, because, again, it's not

just for the X's and O's of the money. There really is something to say, yeah, we are all in on this and we're one. Yeah, makes sense. Yeah. Yeah. And if you need help, sometimes those conversations are difficult to have on your own. But really getting with a counselor and letting them kind of be that barrier and that medium. The third party, yes, for sure, for sure. Because yeah, yeah. Money fights, money problems. It's

the, what, what it, what it really reveals is less that she's probably concerned about the actual money. She's concerned about being burned again. Right. And this level of trust. So like, so there's always a level deeper or even two or three, when you get down to it, money's sometimes just the avenue that this stuff comes out in. But the truth is, yeah, when you get down to it money's sometimes just the avenue that this stuff comes out in but the truth is yeah when you start to there's no way you can have those conversations and not learn so much more about your partner on a deep level like what makes them tick the things that like freak them out the things that you know bother them to their core i mean you're right those are the things that make you feel so much more close and intimate with that

person i was talking to sam last night and he was like jay do you know after all of these years um he was like i still like we were talking about paying bills and putting them on auto pay he goes do you know i still don't have the electric on auto pay because it just gives me so much anxiety he goes and i was thinking about it deeper he goes and there were two times that our electric got cut off when we were when we when we were really struggling he goes and there were two times that our electric got cut off when we were when we when we were really struggling he goes into this day it's something i want to have so much control over just to know that it's done and so when you when you combine money you start to have these conversations that just kind of give you those insights onto how somebody ticks

and what they do when they freak out and what they're like kind of what their mechanisms are yeah and and then that's the beauty of what their mechanisms are yeah and and then that's the beauty of marriage that you get to sit there as the spouse across the table and say totally understandable that makes so much sense and also let me be the rational brain in the conversation and and speak to that fear that it's that you know it's not a logical fear because because here it is i understand i'm not dismissing it but also you don't have to let me be the partner that that brings the logic right there's a beauty of a yin and yang in a conversation that that's what marriage is for. That's right. It's there. So you don't want to miss some of those, Michael, for you and your

wife. Yeah, we want that for you for the betterment of your marriage and your money. That's right. All right. That does it for this hour of the show. Hey, thanks for hanging out with us. Thank you to my co-host, Rachel Cruz. We had a good time, Rachel. We always do. Also, thank you to the guys in the booth for making it happen. Hey, catch us tomorrow. Same time, same place. This is The Ramsey Show. Take care.