The Ramsey Show - App - Early Money Decisions Shape Your Financial Future

Episode Date: December 30, 2025

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George Camel here with a quick PSA before the call start coming in. If you want to leave the money stress in 2025, you need a plan that works. So take what you learn today and put it to work in every dollar. Download the app and start for free today. Normal is broke and common sense is weird. So we're here to help you. Transform Your Life. From the Ramsey Network in the Fair Winds Credit Union Studio, this is The Ramsey Show.

I'm George Camel, joined by my pal and co-host on Smart Money Happy Hour. Another great show on the Ramsey Network. Rachel Cruz is here with us as well. We're here to answer your calls about life and money. The number is AAA 825-5-2-25. Miguel kicks us off in Dallas, Texas. What's going on, Miguel? Hey, George, how you doing?

Doing great. How can we help today? Yeah, hey, so, you know, I'll be following you guys for quite a bit sometime now. I kind of wish I'd started earlier like most people, but 100%. Same. Here we are. You know, I'm working on step number six, thankfully. But I do have a question because I listen to Dave say all the time how credit cards are the devil

and they are the worst thing that one person can use. And I agree with all of that except, so a really long time ago, kind of like Dave, at a very young age, I did bankruptcy. And since then, I learned to live within my means. But I've had a lot of credit cards since then. I just paid them off at the end of the month. I don't have any credit card debt. I haven't had for over 10, 15 years now. Good.

So my question is, you know, if I pay off my credit cards at the end of the month and I am using them a lot so that I can get like, you know, free tickets to travel with my family and stuff like that, would you still recommend that I don't do that? If so, why? Or is it okay for me to continue using my credit cards as long as I pay them off? Well, as of this recording, it's still a free country. So you are free to do as you wish, Miguel. And so is it okay? Sure. If it's working for you, go for it. But the reason you called in, there's something inside of you that maybe is thinking, is there a better way? Could I be doing better? Could I optimize if I use my own money instead of using someone else's and paying it back every month later on? Sure, you could make the argument in hypotheticals all day long. But the real thing here is you're using it to get free travel, correct? Does I hear that right? yeah correct and so have you actually added up what it would have cost you if you had paid cash done your own research found the right flights that work for your family like okay i got i got six hundred dollars in value out of this and it cost me 200 for the card for the year have you done the math on that uh yeah i mean it definitely pays off um like for example last year i took

my family to europe and it i completely paid for our flight tickets. It was $4,000 worth just with points. I think I had to pay a little bit off. How much did you spend? Oh, you said you had to pay it off the balance the next month? No, no, that was just paid off with points. Okay.

You said you owed a little bit still for the flights, is what you meant. Okay. Well, yeah, they make you pay like some taxes, but it was like $200 or something like that. Okay. And then how much did you have to spend in order to earn that many rewards, that many points? This sounds like it was a few years of spending. Yeah, I haven't done the math, but it's probably a couple hundred grand or something like that. There we go.

Ding, ding, ding. So, Miguel, the truth is you could have saved up four grand out of a few hundred grand that slipped through your hands. Am I wrong? Well, but, okay, so here's the thing. I use my credit cards for everything. I believe it. I paid my bills. I pay, you know, everything that doesn't charge me a fee for using a credit card.

Yeah, a lot of those bills will charge. charge you three, four percent for just running that credit card. If they charge me even a penny, I won't use my credit card. So I don't pay my mortgage or anything like that with my credit cards. But there are actually a lot of things that I can pay with my credit car. I do my groceries with my credit card, all of my regular spending. And that adds up to quite a bit, you know, throughout the years. You've impressed, Rachel. Rachel, if you could see her face. She is so impressed. No, she's not. I'm just sighing. Well, here's the thing we go, a couple of things. Number one, studies have been done, and it has been proven mathematically that you do actually end up spending more when you're spending it with a credit card.

And it may just be groceries and all the things, but because there is zero emotional connection to your money, subconsciously, naturally, without you even realizing it, you end up spending more. So even with groceries, for instance, we've talked to people on the show and they say, oh, I just would use my credit card for the things that we needed, you know, the bills and groceries and gas. and then we have heard countless times haven't we George people say actually we ended up going without a credit card for six months to see if we could save money and we actually ended up spending less we don't even know how that happened and I'm like well because I know because there's no emotional so you don't even realize the amount of money that you're actually overspending so over years of spending hundreds of thousands of dollars on this credit card to get $4,000 of flights what could have been saved actually may have been even more than $4,000 with the subconscious spending that you're doing and not even realizing it so that's one thing. And then number two, Miguel, like, and again, this is a personal kind of conviction for me, and it may not be for you. I'm not saying it has to be for everyone. But what is what's so frustrating to me, and I think because we're in this line of work in George and I talk to people every single day who do have credit card debt. And these banks and this whole debt industry has screwed over the American people. They have. They have not helped people. They have hurt people. That's why we

have a job. And because of that, the people that are hurting, the single moms that are calling in that have $11,000 in credit card debt and they're trying to get out or it's the families who lost, like people that are struggling and they are in credit card debt and they're the ones paying the fees, they're the ones paying the interest,

they're the ones making the bank rich to get people like you to get free points and free flights. So off the, I mean, it kind of feels like off the backs of people who are struggling and hurting, I don't want a free flight out of that. I have the ability to save up

and work hard myself and not have to deal with this industry at all. And I have no bill at the end of the month. You know what I mean? like, I pay for my groceries. Sometimes I do Instacart and have them delivered. And then it's done. And then I'm done.

And I'm like, I don't have to play this game with them. And so there's just something so freeing about it. And again, that may not be everyone's conviction. But when I see banks and I see their bill, all the things, I'm just like, well, yeah. And I'm just like, man, they have, you all have screwed over people. And people are giving their hard income to these places, to these industries. And they're not allowing to be able to help themselves, you know?

and so I'm like, I don't, I don't want it. I don't want it. I will save up. I'm, I'm booking a girl's trip. Actually, today. I was telling George, I was going to buy some tickets. And I'm like, I will go on Southwest and buy my, I think it's $196 one way, you know, to get. And I'm like, that's fine. I will budget for that. Like all day, every day. And I don't have to worry about it. So there, I don't know, Miguel, it's. Here's the experiment. This is fun. So let's say you spent $200,000 to get four, right? That's 2% cash back. Fair? Here's the experiment. use your debit card for a year and see if you spent $190,000 instead of $200. Well, that just saved you $10,000 in rewards by not spending more.

So that's the thing that I can't help you figure out on paper. That's something that you need to explore for yourself. And again, there's the moral side. I cover eight objections of why people won't stop using their cards in my book breaking free from broke. So how about this? I'll send you a copy. You read the chapter and then call me back for a fun discussion. Yeah, no, look, and I totally agree with you guys as far as, hello?

Oh, I was going to say, no, you don't, Miguel. Rachel was laughing because you don't agree. You don't agree. You're charging those credit cards up. But it's fine. We love you. We are great. We are great.

Especially with the part that, you know, there's, you know, you don't feel the money coming out of you, you know, when you're using a credit card. So my question is, so if I wanted to. I wish we had time for more, Miguel. You burnt out the clock telling us about all the rewards you got going to Europe, my friend. But hey, call us back and hang on the line. I'll send you a copy of Breaking Free from Broke. I think it will enlighten you with all the stats. Statistics show that half of Americans don't have enough.

life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch. And oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis. here and you know you got two options while you're sitting and talking to a young widow she's

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Go to Xander.com or call 800 356-42-82. Up next, we have Jake in Grand Rapids. Hi, Jake. Welcome to the show. Hi, how are you doing? We're doing great. How can we help? Hi there. Yeah. So I'm fresh out of high school. I don't have any debt. I don't, I've never taken out any loans. And I'm curious that when I start to go look for a house, 10 years down the line or whenever, how will I be able to get a mortgage without having any credit? Oh, Jake, you were speaking my language. This is one of my favorite questions. Because it feels like a magic trick. You know, when people ask this question, they go, I need to build the credit.

and I can go through how to rent a car without a credit score, renting an apartment, all the things, but the house is the one that gets people. So that tells me you already know there's a way to do it. Mm-hmm. Yeah. So what have you found out in your research so far about how to buy a house without a credit score? So I've heard, I've heard like different things and it doesn't really make sense to me. Like someone brought up like a manual underwrite and I'm not really sure what that is. I don't really understand what they're talking about. Perfect. So when you think about the credit score, this was invented in the 90s and all it did was make it easier for lenders

to kind of do a vibe check on the people they were lending money to, right? So Jake has a high score. Great. He's a reliable borrower. We know Jake's probably going to pay back. Well, back before credit scores existed, instead of automated underwriting through, you know, computers and AI and credit scores, there were something called manual underwriting. We're a real person like me, down, looks at Jake's tax returns, his pay stubs, his previous payment history on his rent and utility bills and insurance and go, oh, okay, Jake's a reliable person. He's going to pay back the money he borrowed. And so that's all manual underwriting is, is instead of relying on a credit score, it relies on a real person to look at your financial documentation. Yeah, versus like a

computer or technology doing it. It's a person. So manual versus not. And a lot of mortgage companies, because they're truthfully just lazy, go, no, we don't do that. So people think, wow, I can't get a mortgage without a credit score. But there's a lot of companies that will do it. And the main one that specializes in this is called Churchill Mortgage. They've been a partner of the Ramsey show for over three decades now. And that's who I went through to get my last mortgage without a credit score. And they made it real easy. You'll have to supply things like, you know, a 12-month history of your savings and bank accounts, tax return for verification of income, rental payment history. So if you've rented an apartment or even from your family and you have an on-time payment

documented every single month, that counts. And then, you know, an alternative trade line, like a cell phone bill or insurance bill that you paid regularly. So if you have all of that, plus you got a solid down payment, you're going to be in good shape. It's going to be kind of a nothing burger. Gotcha. All right. Yeah, that makes a lot of sense. Absolutely. So great. You know what, Jake, I'll throw in, George, I want to give away one of your books. Yes. To Jake, breaking free from broke, because he has a whole chapter, or multiple, maybe, even. A whole chapter on credit scores specifically.

On this specifically. But Jake, you're at a great age, though, to how to take these principles and actually apply it to your life because you're starting adulthood. I mean, like, you're in it. And so this book is going to be probably the best guide to help you continue to live debt free. What does it look like to honestly build wealth in a really healthy, solid way, not in like all these, like, shortcut ways that I feel like so many people are talking about.

And just avoiding the noise and confusion and traps out there. And Jake, you've done such a great job. I want to applaud you. If you just continue down this path, you're going to have so much money that credit scores will become irrelevant because you don't need to go borrow money for a car loan, right? You're going to be able to pay cash for a used car. Yeah. So keep it up, man. Yeah, that's great.

That's my encouragement to you. You're doing the things the right way. Hang on the line and Emily will pick up. We'll get you that book. All right. Up next, we have Derek in Salt Lake City. Hi, Derek. Welcome to the show.

Hi, thanks for taking my call today. Yeah, absolutely. So my question is kind of regarding my girlfriend and her desire to work or not to work really. You have you guys a little bit of background, so she's 26 still in college working on her bachelor's degree and her parents have a deal with all of their kids that as long as they're in school, they'll pay for all of their college and all of their living expenses until they either graduate or get married. That's a wild situation. Well, she's working on her bachelor's degree, and she's 26.

Has she been in since she's 18? So she did take an 18-month service mission for her church, but other than that, she's been full-time school through summer. And just getting a bachelor still. This isn't like a master's or anything. Nope, this is just her bachelor's degree. Is she just stretching it out because she's got mommy and daddy's bank attached? I'm like, sweet, why ever leave school?

I'll be in school until I'm dead. That's kind of my fear. so she does she has two older brothers in the same situation who are 31 and 29 and they're still in school working on yeah also still in school never worked hey parents let this be uh oh man your memo don't do this ever Derek does she feel like a winner to you uh that's no not at this particular moment i don't know how long this relationship's going to last because man i so that's kind of where I didn't know how bad the situation was. I didn't know their work history or anything.

Just recently found out that none of them have worked. Talked to her about that. And we've been dating a year. So we started talking about marriage and finances. And this is when it all started to come up of, okay, what's the plan? And what's her plan? Or now it sounds like as soon as she gets married, her either me or future husband is taking care of all expenses while she finishes school.

Yeah, I would get some clarity around all of this. Have you shared with her your concern? I'm saying, hey, I'm kind of worried that you're just going to stay in school forever because your life's being funded. Have you kind of been honest with her? Yeah, I've been honest with her, and that's why I reached out to you guys because we were talking about this, and I work full-time. I have a very stable job and been doing that for a while, debt-free,

kind of a whole nine yards there. But I asked her to get a part-time job during the summer next semester to kind of get some financial freedom away from her parents. But if you're in her shoes, why would you have, why would you work part of time? Because hopefully you have the character to say, I'm an adult and I'm going to start making adult-like decisions, and now it's showing that her character isn't there. Yeah, that was my tester to see if she was willing to put in some effort because I want to make things work, but if I'm expected to take 100% of the financial,

burden for the next 50 years. I don't, I don't know if I can handle that. Right. And it's not even like a situation, Derek, where, you know, she's working and she's like, hey, but when I become a mom, I want to be full-time at home and that I want my job to be that, right? I want to transfer home and be a full-time mom. But there's no initiative at all in who she is.

And what always that fear is to me is that it starts to bleed into other areas of your life. You know what I mean of like this procrastination? Just apathy. Apathy or laziness? or like, I don't know what it is, but I'm like, man, yeah, it's just not a very, it's not a lot of attractive qualities that come out of that. And I'm not saying that she needs to, like, go be some corporate woman climbing the ladder and working 80 hours a week.

It's not even that, but it's just like, yeah, I want the dignity to have my own money. I'm 26. I'm 26. And I've been in school for, what, eight years? I don't even know how you drag out a bachelor's degree for eight years. That's what I'm saying, even if it was a bachelors. Is she just taking, like, part-time classes or, like, flunking every time? that's she's had to retake a lot of classes where she's failed so she wants to get into like a master's

PhD program so she yikes dude yeah Derek for those reasons I'm out I mean I'm sure she's a wonderful person but this is not someone I want to continue down the path with personally based on what you told me because what's so hard Derek when you get to this point of a relationship and like in george knows this he's been he's married and so am i but it's like you have the romantic side right you you fall in love they're attractive you know you have chemistry like all that stuff is great but then what ends up kind of where like the rubber meets the road is when real life happens and it's like i've chosen someone in my life you want a partner in this life yeah to walk life with and life isn't easy and so there's a level of resilience you want in a partner and a little grit yeah and and

none of that is coming through right now and and i don't want to blame her for her brothers but the whole family's a lot of dysfunction happening here 301 year old man is still in school like that's her brother and that's who you're marrying into too Derek who's hiring this guy I see on your resume here you've been in school for 13 years and have yet to get a bachelor's degree sure you get the job man Derek I'm so sorry Derek what do you think what do you think what's your next step uh so that's my next step was to to allow her to some time to get a job and if she wasn't willing to work you know 15 20 hours a week it was kind of the end I think I think that's fair. Yeah, I don't think that's unreasonable when you're not, you know, looking for her to make a hundred, you know, it's like, oh, well, she's not making $100,000 a year. She's not, you know, it's nothing to do with that. It's just the effort as a human and an adult in the world today.

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app store or on Google Play. All right. Up next, we have Gabe in Kansas City. Hi, Gabe. Welcome to the show. Hi, how are you guys? We're doing great. How can we help? Yeah. So how do I stop spending everything I make so I can start reaching financial goals for myself? Oh, interesting. What you spending money on? Well, honestly, mostly DoorDash, but then it's random stuff. Like, I always find a way

no matter how much money comes in the paycheck to spend it all. It's fair. Love will find a way. Have you thought about like deleting the DoorDash app and forcing yourself to go inside of a grocery store?

Yeah, well, I actually didn't. I did that like two days ago. And like you said, Love will find a way. It's just like, a creeping addiction, you know. So you see like the zucchini you bought three days ago and you're like, Ah, DoorDash sounds better.

I'm re-downloading it. Yeah. Like going back to an abusive ex. To a zucchini? Why don't you at least say like... Well, we all aspirational grocery shop. You know what I'm going to eat a zucchini. I'm going to use a whole bag of spinach.

I saw a good Instagram air friar zucchini recipe. I'm going to, you know. A thing of spinach. Well, Gabe, but here's the thing. What are your financial goals? Because I think they have to be big enough and powerful enough to a fuel your love of DoorDash to stop that. Yeah. Well, first is get a car, then after that a house, and then after that cracks a million

marks in network. Love it. Those are great goals. Okay. That's the American dream summed up. What are you doing for a living right now? Right now it's not good. I'm actually working for the master I feed. I door dash a lot from my gosh. Wait, what?

Well, no wonder it's easy because you're around it all the time. You're like, this Taco Bell sounds good. Wait, do you drive for DoorDash? I'll pay myself to do it again. Okay, you're not working for like DoorDash corporate. You're like a... No, he's a DoorDasher. He's running around food for people.

Yeah. How old are you? I'm 20. Okay. Are you in school? Did you not go to college? What happened? Yeah.

Oh, I'm in school for business management right now. Okay. What do you want to do with that? Well, ideally, you know, you get a short-term management job to kind of build up a nest egg and then go out on my own and try my hand at the entrepreneur I can't talk. So you want to work in management of something? Like is it retail? Is it corporate?

Have you sort of drilled down into that to what you'd be most into? Yeah, I'd be most into corporate, but obviously if someone offers me a job paying more than door desk, I'll take it. at this point. Okay, how much longer in school? Yeah, when you graduate. I'm expecting next summer. Okay. Cash flowing it, or are you going to debt? I'm cash flowing it. Great. Do you have any debt? I have $200 in credit cards. Okay, we got that. It's good. Okay, Gabe, you know what? I'm going to say, you're, I'd say you're a typical 20-year-old guy. I don't think there's anything wrong with you. I think you need a little bit of motivation.

and I think when you're in school you have a part-time job you know you got to just float your expenses I mean are you living at home what are you doing like for rent and all of that yeah right now I'm living at home which probably doesn't help the spending yeah well it's fine

I mean you're in college I think that's totally appropriate so what do you have to pay for what are the things that are you're responsible for right now it's just my phone and gas phone and gas Okay. And what are you making every month?

Naturally, it varies, but it's usually about two grand a month. Okay. Because if I'm you, I have very little motivation to even go work when my only two things I need to survive is covering a phone bill and gas. And because you're a full-time college student. So you're in college, you're in college, which I don't think it's bad. Yeah, that's great. You're in college. You're doing well in your classes.

You're going to graduate on time. So I think the best thing for you gave honestly right now is to work on your habits. and you need to start creating some new financial routines and so you can do this you can even automate some of this I don't always recommend that for people because I kind of like people's behavior to change

because they're actually the ones doing it but for you I would almost say yeah make it a goal where you save half of that maybe you save it what if you save the $1,000 a month because how much is your phone and gas cost not much it usually shakes out to around 3, 400

okay so yeah what if you gave your yourself, $600 to spend on how you want, and then save half of your income. And you do that for the next, golly, six months, you'd have $6,000 when you graduate. That'll help you upgrade a car and actually start moving. But you can even go in and automate some of this. Like you can, you know, set up some systems in place with online banking and that kind of thing. And when your paycheck hits, it's like pay yourself first. Yeah, absolutely. I'd be giving some too. I think there's a practice of generosity in there, give, you know, it's ever how much you want, but even 200 bucks a month. Practice that part. Practice the saving part. And then you can still enjoy some of it.

So I think you're in a good spot. I think it's just the habits and the routines month to month that you need to change. And when you kind of get those in place, you start to be disciplined, you start to know what you're doing, you're telling your money what to do. And then when you graduate and you get your first job, those habits just go in from a $2,000 a month to maybe a $5,000, $6,000 a month salary. And, you know, you've changed the way that you handle your money. Literally, your behavior changes. Okay.

I was exactly like you, Gabe. I'm looking back at when I was... You were not that much of a spender. No, but when I was living at home, I was working at the Apple store. Yeah? And every paycheck would just go to, like, gear and just spent... I wasn't saving any of it. Well, because there's no urgency.

Exactly. I was living at home. And so I just, I remember feeling that way, Gabe. and what unlocked it for me was getting out of the house. I moved across the country, started fresh, finished school, and that sort of put a new pep in my step to go, listen, mom's not going to save you with her home-cooked meals. I don't think he should move out, though.

No, no, I'm saying once he graduates, though, he just just go ahead and find it an actual job. Don't stick around home saying, well, I could save up for a house faster, and then all of a sudden you spent 500 bucks on DoorDash every month. That's right. That's right. Yeah. So when you graduate, you need to move out. That needs to be a big goal. Like create some problems for yourself because we are wired to solve. problems. And right now, you just don't have many, which is not a bad thing. But if you want to

accomplish your financial goals, you kind of need to have some, you know, some mojo. And right now, it's hard to have that when mom is folding the laundry. Dave, what kind of car do you have right now? Well, right now I don't have anything. I'm driving my dad's for DoorDast. Oh. Whoa. How does he feel about that? He feels fine about it because he does it part-time, too. So, you know. Okay. He doesn't really mind.

Okay. Well, I would make that a goal then. I think that's a great. You said that, but I would reiterate. Yeah, I would reiterate. And if you saved $1,000 a month, Gabe, I mean, you have a $6,000 car in six months. You know what I mean?

Like, it... Do you have a high-yield savings account, Gabe? Yeah, I do. I'm shopping around for another one because I'm not a fan of the one I have. Perfect. We got just the one for you. Go to fairwins.org slash Ramsey. They just created a new bundle for our fans.

It's got a great high-yield savings account, and so you can actually attach your checking and savings and then start to automate that thousand bucks a month to just go straight from checking into that high-ield savings. And like Rachel said, if you automate that, you'll just pretend the thousand bucks never existed. So pretend you make a thousand bucks a month, and now we have to live off of that.

That helped retrain my brain as well. Okay. Yeah, make sure to check that out. And you'll get the Ramsey debit card with that bundle. Oh, yeah. And it says, dead as normal, be weird. you're not deeply in debt, Gabe, but at least you kind of get that reminder. Yeah, every time you see it.

Especially as you enter adulthood, it's so easy to be tempted to take out the car loan, open the credit card and go into debt, take out the personal loan, whatever it is. And so this will help you avoid that temptation. Yep, for sure. This is very natural. You're 20. You're not weird. You're just 20.

Yep. Just put some disciplines and new habits in place. I think you're going to be fine. But George Camel is spender. What can I say? Left to my own devices with Mama Camel cooking at home. Unbelievable. I'm spending every $16 an hour I make.

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So go to casper.com slash Ramsey and use promo code Ramsey for 25% off mattresses and 10% off everything else. You get free shipping too. That's casper.com slash ramsey. Ramsey, promo code Ramsey. Exclusions apply. Our question of the day is brought to you by Y-Refi.

When life happens and those private student loans go into default, Y-Refi offers real responsibilities, not judgment. White-Refi will help you explore low-fixed rate-based loans on your unique situation, based on your unique situation. go to Y-R-R-R-E-F-Y.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey may not be available in all states. Today's question comes from Mason in Michigan. Is Dave's stance to only buy a cell phone in cash, or is he okay with putting it on an installment plan with a cell phone provider over two or three years? Couldn't tell you Dave Stance. I could guess Dave Stance,

but we can give you George and Rachel's stance at least. I don't want to put words in the guy's mouth. He's not here to defend himself. But the simple answer is, yes, only buy a cell phone in cash. An installment plan is effectively debt because you have to finish paying off the phone before you actually own it. And you're also locked into this contract for two or three years. So if anything happens, you want to switch, you want to change phones. Well, you're kind of stuck in these handcuffs with that cell phone provider.

And so I always recommend buying a phone in cash. And if you can't afford the brand new iPhone 16 Pro Max with 500. 12 gigabytes, then don't buy it. You can buy a used phone. In fact, I just sold a used phone online. Oh, you did? Within a day. I got great money for it. And you were laughing at some guy's phone in the lobby. It was like an iPhone 6. It was so vintage. It had the one lonely little lens. We were taking pictures and George. I never even noticed that stuff. George is like the Apple guy. And he's like, hey, is that the iPhone model for? This is from a former Apple store employee. I know. And listen, and the guy in the lobby with the phone, he's doing great.

He's thriving. He's living a great life. Thriving. He's fine. So you can buy a cheaper phone if you need to. All's going to be okay. I feel like these installment plans also have caused like cell phone inflation because the cell phone company is like, we can charge whatever. They'll just put it on payments. Yes. So it's part of the problem and it causes you to get into a cycle where it's like a gateway drug to other payments. If you're okay with this payment, why not buy now, pay later? Right. They promise zero percent too. Well, and the thing always is when you get stuck in a system where you have to, you're locked in and you're locked in and you're you cannot get out.

That's not fun. Like, that's not, that's not what you want to do. So that's essentially what debt is and essentially what these kind of plans are. That's the simplest answer. Good question. I hope he's buying an iPhone. Don't be an Android guy. Oh, come on, George.

I'm not an elitist. Such a judgmental. Do you know I had an Android? Did you? Yeah, I had a Black Bear. This is back on the 20, 2007 or something, but it was a Blackberry. That doesn't count, does it? And then an Android.

That's not an Android. Then an Android. I'm giving you my cell phone. I was a Nokia user and then a BlackBerry and then an Android for two years. And I swear I would never get an iPhone. I don't know why. I didn't like them. I didn't like the people that had them. There we go. That's the real answer. That was in like 2010. And now you've changed. Now you are that person. Now I'm that person. And I've been that person. It's fine. I kid. I like to upset the Android people with their green bubbles. I don't need you in the group chat. All right. That's all I'm saying. All right. Okay, let's go to Lauren in Kansas City. Hi, Lauren. Welcome to the show.

Well, hello, everybody. Hello, how can we help? Okay, so my question is, should I take money out of my savings to start a small business to hopefully make more money to save more money? Because at this point, I think I'm on Baby Step 6. I just own a three-bedroom condo technically in Brants in Missouri, and I'm trying to pay that off as quickly as possible. But I'm literally working.

80 hours a week to try to get ahead, and I'm killing myself. Oh, girl. What are you doing for work, and what do you make? Well, I am a property manager at a Choice Hotel, and, well, I make 20 an hour, but so that's not even $40,000 a year, and my front desk agent at the Hilton, and that's 16 an hour, so I probably make about $34 a year, if I'm lucky after taxes. And you're legitimately working two full-time jobs? Yes.

That's exhausting. I'm at the Choice Hotel, and then I leave here at 2.30 to work 3 to 11. What does the growth track look like in the hospitality world where you can make 75K a year? Well, you're wanting to start a small business is what... You want to leave this industry completely? Maybe not completely. I want to do the... If the business got busy enough, I would leave the hotel business, but if not, I just want to add extra income.

Sure. Because I'm more passionate about events and entertainment and mainly party planning. So pitch us your small business idea. How much is it going to cost and what's it going to be? Okay. So I want to rent out photo backdrops, you know, like the florals, like the pretty stuff people stand in front of to take pictures at like bridal showers, baby showers, weddings, Mother's Day. And I do have a couple of connections like with the Hilton and the convention center in town. Because there's a lot of weddings and events. Have you done these before, Lauren? Yeah. I have. But it's just like I have two backdrops. that I own personally.

Okay. And I've ringing them out a handful of times. And how expensive, how much money can you make by doing that? Like if an event rents out one of your backdrops, how much are you making? Well, depending on the backdrop, I mean $100, well, $200 for the most basic one, and like up to $400 depending on how fancy the backdrop is. But my issue is only have two and they're not fancy. So if I invested in more backdrop, it's going to cost me anywhere from $3,000 to $5,000,

just to have a handful of backdrops. Okay. And how much do you have in your savings? 30,000. 30, nice. Are you single kids? Yes. No children.

No man. Yeah, so is $25,000 a good emergency fund for you? Do you feel comfortable with that? It feels like a lot. Oh, yeah. Yeah. For sure. And yeah, I would take...

Because I only owe $54,000 on my condo. So I was trying to just, you know, get up to $60, pay it completely all. and then, you know, my $5,000 would be my emergency fund, but it was like, should I try to do the side gig or the side project business to make more money quicker without killing myself? Yeah. How much of this can you do on your own without hiring other people? Because you're kind of stuck trading your time, right? You've got to bring the backdrop, set up the backdrop, break down the backdrop, you've got to

keep it local to where it's drivable, right? Exactly. For the most part, I can do it all by myself. Now, in addition to the backdrop, I also do balloon arches, and those can be anywhere from $100 to $300 to depending on how much time it takes and how many balloons it takes. Yeah, well, I mean, if you had a great backdrop, Lauren, you know, and you could charge $600, and you did one of those a week, I don't know how, I don't know how many parties are out there. That's $2,400.

Yeah, that's $2,400 a month. Yeah. It'll be more popular during, you know, like a special event. holidays, like Christmas, New Year's Eve. Sure, sure. Because ideally, you could get to the place where this replaces the front desk job that you're making 34. And if you could do this instead, you know, maybe still keep the other one, but replace at

least one of these so that you're just working a few hours versus till 11 every night, you know, at the front desk. That seems worth it to me. And it seems like it's been somewhat proven out the fact that you're... You got connections. You've done this before. You've made money. So I would, yeah, if you're going to spend cash...

on this and go with a small investment up front of three to five grand, I would go for it and see where you can take this thing and see how you might end up needing to hire someone out because you're working and can't be at every single event in all places at one time, but maybe you pay them, you know, 15, 20 bucks an hour to go set it up and break it down and you still make profit. And that way you don't have to be everywhere. Yeah, exactly. And it doesn't take long. I mean, they're heavy and kind of annoying, but it literally takes me like not even 30 minutes to set it up and, you know, get it in place. And then 30 minutes to break it down and put it in my car.

It's great. But also drive a Prius. I was going to say, I feel like you're going to need a pretty big car to carry all these backdrops. So what I don't want you to do is go, I had to finance a $50,000 van to transport the backdrops. Yeah. So just be smart about it. I think my car has been paid off for nine years. So I'm going to let it, you know, die on me.

Alarne, you've been very smart. You don't have any consumer debt. you have a lot of savings, you're taking your time, you're working to pay off the cond. I mean, you're doing, your gut so far is correct, what you've been doing. So, yeah, I trust you. And maybe I'd say I'd work on saving up and cash flowing a SUV or van so that you can use it for business and increase your income that way too. Yeah, because I also wanted to, like, not just do the backdrop, but, you know, make it pretty,

you know, purchase a few, like, benches, which I have a couple, but they're, like, fold-up benches. I can't get couches and stuff. Yeah, that's a lot. Too much. For sure. Just go slow and be smart about it. Use profits to reinvest in the business and start to grow this thing and see where it goes. Yeah. I'm for it. People love a balloon arch these days, Lauren. Ladies love a balloon arch. You're in a great business. The men could do without them. Let big grocery bills spoil your holiday plans. Shop at Aldi first. They've got USDA choice meats like beef, pork, and even your turkey,

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Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with George Camel, and we're taking your calls at AAA 8255-2-2-2-5. Up next, we have Emma in Minneapolis. Hi, Emma. Welcome to the show. Hi, thank you so much.

Absolutely. How can we help today? So I am a senior in high school. I'm freshly 18 years old, and I got into my dream call. college, and I don't know how to tell my parents. Wow. I thought there was going to be something bad that happened. This is good.

So give us the context of why this is bad news for your parents. So my dream school for my whole life has been University of Northwestern St. Paul. Whole life. Since you were zero years old, you're like, this is on my dream Pinterest board. Is that a private school? yes it's private and Christian yep how much is that tuition it's about 38,000 a year okay um okay so what have you and your parents talked about when it comes to college um so i've known for a very long time that my parents were not going to help us we're not going to help me with college um i'm the oldest of six kids and we live

on just my dad's income. Okay. And so they don't want me to go there because they don't want me to go into student loan debt, which I understand. Yeah. 100%? I think you have probably 99% of people listening to this saying,

yep, we agree with your parents. We are. And so you've not told them because you're going to go and you're going to go take on essentially over four years $160,000? What I haven't told them is that I got...

What I haven't told them is that I got a partial ride scholarship. Oh, well that's great. Okay, so how much does that cover? It covers about $44,000 over all four years. Okay. so you're down to like you'll owe 120 or something what's the number it's 11,000

a year for all four years so I'm down to like a hundred and five thousand dollars okay and how much do you have saved I actually do not have a savings account I have been um helping my parents with the bills and stuff I work so they're struggling financially yes okay oh wow and you're working part-time and that money that you're working for is going to the household yes was this a something you're doing out of kindness or was it like a hey if you're going to live under a roof you got to help around because times are tough no it's kindness okay and they're and they're they're taking your money I mean they're yes and no um they so I can't

I help pay for groceries and stuff, and I am aware that some of the money that I'm paying them, they're putting in a savings account for me. I just don't know how much that is. So we can get some clarity on that. We've got to know if it's $1,000 or $10,000. I think if my math is right, it should be around $8,000. And what if it's zero? What if they spent it all?

I don't know. Yeah. Well, I hate to say it. I mean, I know there's, you know, people are in different circumstances financially, but asking an 18-year-old to help provide for the family, that's tough for me. So I would hope that they just took the money and put it in a savings account. But I would ask them tonight because it is October. And if you're a senior in high school, you know, you're starting to get early. I mean, it's what you're doing. You're getting college. You've sent out college applications.

You're getting the letters in. You're figuring out your next steps. And you do that around this time. And so for you, Emma, to know going into the next nine months of like what you have to work with and staying within that. So I want to be really kind because I really appreciate the dream school. I know that, you know, you've thought about it and all of it. But there is a sign of maturity, Emma, that when you choose to live within your means, you don't get to do everything you want. And that's a true sign of an adult. And we talk to people on the show that are 45 that don't even grasp that. And so I would implore you that your friends, Rachel and George, can tell you, in the real world,

when you go out to get a job, majority of people don't care what's on your diploma. They really don't. Some care that you have a four-year degree. I mean, that's, I think, a great thing to have, you know, so I think that's great. But people don't care and they don't, you know, the name of the school and all of that, it is a, it is not usually a sign that you're going to be successful and get a job that's going to then carry you throughout your adulthood. And going $120,000 or $105,000, I think it's a little bit, I think that's a little bit, I

It's going to end up being a little bit more than that, after room and board and everything. What are you studying? I was planning on double majoring in pastoral ministry and communications. Emma. We just talked to a worship pastor who's making $58,000 a year. And he's been doing it a long time. That's a successful worship leader. It would take you like seven to eight years to pay this off.

No. No. Please, please, please, no. What do you want to do on the other side of this? Tell me the job. Like, if I could just do this job, it would be a dream. Summer camp director. Okay.

Love it. I love the clarity there. Here's the good news. I don't think you need a communication degree or even a pastoral studies degree to be a summer camp director. You know what you need? Experience at a summer camp where you work your way into a directing role. That you can do for free.

So this is actually great news. This gives me so much hope for you that we can avoid a crisis. Because here's what, I'll let me play this out. And you can go watch the borrowed future documentary we did on the student loan crisis. I think it'll help help you understand some of what we're talking about. My fear for you is that you can never be a summer camp director because there is no summer camp director job that pays enough to cover the payments on the student loans that you end up taking out. So you're going to have to go get a job.

You're going to end up being, you know, an administrative assistant or something, I mean, which is not bad. but you're not going to get to do what you want to do in life because you're going to have bills to pay for years, for years and years and years and years, for a Christian private education that you didn't need. You don't. You don't need it. Now, would it be a great time going to the school? I think so.

But is it worth $120,000 for the price to have this experience? I don't think it is at this point. Now, if you had a full ride and you were like, I just want to do this for fun, I'd go good for you. Go for it. But I just, I got into my dream school. Emma when I was 18 and it was 50 grand a year for four years going to a film school. And I said, I don't think I can stomach 200 grand in student loan debt to maybe be a film director one day.

And I think that was the Lord saying, please don't do this young man. Your future is going to be bright without that. When you look at scripture, Emma, every time debt is mentioned, it's in a negative fashion. Now, it's not a sin. If you end up going, you're going to get to heaven with student loans. You're fine, right? It's not a sin. But every time it's mentioned, it is negative. It's a curse. It's you are a slave to the lender, it is not wise. Go read Proverbs. Go read Proverbs. What God is set before you. And before you make this mistake, Emma, please listen to your parents. They're giving you good wisdom and figure out how much is in that account. I think you can go to a community college even for a little bit if you need to.

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this is the Ramsey show. Open phones at AAA 825-5-2-2-25. We're heading to Tampa next to talk to Corey. How can we help, Corey? Hi there. Thank you for taking my call. Sure. What's going on? I'm contemplating selling my small business to accept a job that would increase my total income to try and get out of this debt that we're in as quick as possible, and I'm just trying to make sure that I'm doing the right thing. How much debt are you in? Right around $100,000 before my mortgage. Okay. And what kind of debt is the $100,000? Let's see.

We got $35 is allocated towards the small business. It's a food truck. So that was a startup loan from friends and family members. About $30,000 in student loans, $10,000 to fix the AC. and then about 22,000, or no, 25,000 in vehicles. Okay, and what is this business worth if you were to sell it? I would estimate around 42,000 to just sell the trailer, and then I also have a truck that I bought to use with the business

that I could potentially let go as well. What's that worth? It's worth right around 13,000, and I owe 18-5 on it. Okay, so you're about 5 grand underwater on that. Okay, so you would get 55K essentially for selling this business? Correct. And you'd need another 5 to get out of the underwater loan, and you're about 100k in debt. So this gets you out of debt twice as fast, and what's the household income now?

Right now, my wife just got a promotion. she makes 67 before bonuses with potential 12,000 and bonuses. I make about 550 at a part-time job a week, and then the trailer, we really don't take a paycheck from it. I just whatever profits at the end of the month I throw at debts, which is averaging between 2,000 and 3,500 a month. Okay, so altogether you guys make about, 100k a year?

Roughly. It's not including the trailer in any way, shape, or form, seeing as how I don't take a paycheck from it, it's closer to like 85 to 90. And what's the new job, Corey, that you're looking at? I would be taking a chef position at the part-time job now, which would get me up to 73 guaranteed with a potential 12,000 bonus. as well.

Amazing. For the food truck itself, is it something you would go back to doing after, if you were completely debt-free, would you still keep this, keep doing this, or are you getting burned out? Well, I kind of burned out on it. I've been doing it for about two and a half, three years, working seven days a week, you know, 70, 80, 90 more weeks. And just, it was never supposed to be the end-all, be-all.

It was supposed to be a stepping stone towards a brick-and-mortar location. and it's just looking like the reality of it puts it you know five six seven years down the road and I just don't think that I could put my family through that hardship yeah totally that's mature yeah and I think I mean I think you're listening to your gut and I think you're you're seeing kind of the tea leaves of what's happening which I think is really smart Corey really really smart especially when talking about the food industry we've gotten calls of people that go straight to want to go straight to the brick and mortar and take out a massive loan. And the food industry is one of the highest ones that, you know, the highest parts of small

businesses that goes up and it goes down. And it closes more than any other industry. Yeah. It's just a, and as you experience with the food truck, it is just a, it's a tough, it's a tough world to be in. It's a lot of work, a lot of work. And again, not always with the guarantee that it's going to be successful. So being a chef somewhere, I think sounds like the perfect next stepping stone.

You're going to get a 50 grand raise while getting rid of half of your debt. And you're still doing the thing you love. You're still able to be in that world of cooking and food and hopefully innovating. Yeah. I mean, like to me, this is kind of a no-brainer, honestly, because I don't know, you kind of get to still live your dream, but not have to deal with owning anything right now. Right. So, yes, I would.

I would do it. I try to get top dollar for your trailer and the truck. And do you have anything in savings? we have right around 2000 in our emergency savings and then I have about 2,000 cash that just kind of floats around for expenditures okay you may want to wait another paycheck or two get that 5,000 difference that you're underwater on so that you have the money to actually get rid of the note on that truck okay and that way you're not having to take out another loan to clean this up and then I take that new job man and I I would clean this mess up

you're probably getting, I mean, you'll be making, what, 150K household at that point? Roundabouts, yeah, you know. And so you're 50k in debt. 24 of it's not guaranteed. You know, so there is a little bit of a fluctuation on it. Sure. And then, you know, we're just. But making about 150 with 50K left to pay off, that's going to get knocked out real quick.

Versus your situation now, which is we make 80-90 with 100 to pay off. The math ain't math in on that one. So we do need some drastic changes. You're willing to do it. You're burnt out on this. Guess what? Later on down the road, you may decide to do this dream again, but you're going to do it with cash with more experience while making more money. And so I don't want you to, I know it's hard to grieve something that you put your heart and soul into, and I can tell you're passionate about it, but there's also wisdom and going, now's not the time. Yeah. And, you know, we've just found Dave Ramsey and your whole system a few months ago, and we have made considerable progress towards our debt.

We always lived in all of our debts from three years previous. We haven't gone into any debt in the last three years. We were just paying minimums, and then we read, you know, a total money makeover, and we've started trying to get out of this debt. We're still struggling with the budget somewhat. You know, I feel like there's still more room for cutting some expenses, but it's just, you know, been a little bit of a struggle. Yeah, and just to give you some hope in it.

I mean, you guys have just been doing this a couple of months. And even with the budget, we say it usually takes about three to four months to really get in the cycle of doing it. And it actually be correct that you can live on. So you guys are just starting out. And the fact that you're so gung-ho about it, I'm like, you're going to make great progress. And the budget is easier to do when you have less debt, more income. The numbers will start to give you some hope instead of go, oh my gosh, how are we going to fix this puzzle? And so we're wishing you the best, Corey.

Appreciate the call. Yeah. And you know, hold on the line, Corey. Christian will pick up and we'll give you every dollar premium. meal for a year on us. And this is our budgeting app that hopefully will help give this a little bit more organized. It's a very, it's a great app because it's very fine-tuned. Like you get to see all the catteras. Yes. All right. Let's go to Kathy in Boston. How can we help, Kathy? Hi. Hey. What's your question? Okay. I'm 67 years old, and I'd like to retire in three

years and I do have money in stocks and bonds and mutuals. And I'm not sure if I should keep it there or if I should maybe switch to annuities or IRA CDs. I didn't know the best way to go. Well, I mean, switching to annuities and IRA CDs, you're talking about really lowering your ability to make any money. And so you're just sort of preserving what is. And, you know, if you're 67, there's a good chance you live to 87 if you're in good health, right? Yes. And so I want to see your money grow beyond the rate of inflation. So what is your money in and how much? I have approximately $215,000, and that would be like stocks bond mutual because I have three different places that kind of manage it. Okay. What else? I do have Social Security. Okay. And then I

work and I work. Okay. So what's your plan to actually retire? How will you cover your expenses in retirement? Just with my investments in the money I have and, of course, my Social Security. What are your monthly expenses? Oh, let's see. Maybe $1,600 a month. I mean, $2,000 would be way overkill. Okay. And what's your Social Security payment going to be? $2,100 after taxed. Oh, nice. So that's enough to cover the baseline bills for now without more inflation.

and I would leave your money invested in the market. I wouldn't go to, you know, search for a 4% return when what we've seen in the market, I just checked my 401K last year, Kathy, 37% return when I just left it in and didn't touch it and left it in the overall market and gross stock mutual funds versus those less risky but lower return things like those CDs and annuities. So I would stay on your plan. This is The Ramsey Show. Owning a business can be a heavy load.

You want to serve your customers well. Make a healthy profit and grow. And your team, family, and customers are all counting on you. And now everybody's talking about AI like it's magic. And you're wondering how to keep up. You're carrying a lot. but you don't have to do it all alone. That's where NetSuite comes in.

Over 43,000 businesses, including Ramsey Solutions, use NetSuite to lighten the load by bringing all their numbers into one system, accounting inventory, CRM, payroll, the works, and now NetSuite's AI takes it further, automating busy work, flagging inventory issues, spotting cash flow problems in real time, and catching risks before they hit. So you're not just,

closing the books faster, you're making decisions confidently. And when your numbers are right, that takes a lot of pressure off your shoulders. And yeah, switching systems is a big move. But NetSuite's sweet success process gets you up and running fast. Go to NetSuite.com slash Ramsey for a free product tour and to schedule time with a net suite rep. That's netsuite.com slash Ramsey. Welcome back. Going to the phones, we have Sarah in Riverside, California. Hi, Sarah. Welcome to the show.

Hi, thank you for having me. Absolutely. How can we help? So I have some guilt and pride around using child support. money. So I was in an evasive relationship, and by the grace of God, I was able to leave when my son was about three weeks old. Oh, my gosh, Sarah. I met my now husband when my son was six months old, and he's now 12. My husband and I had sat and talked and said, we don't want any money. We don't want anything. We want nothing to do with him. Well, the judge made the decision that it's not our choice and it's not our money. It's for our son. So we were just putting all that money in an account. We had some debt.

And in 2021, I lost my job. And we needed four walls. So we dipped into that account. As of January of 2025, we are officially done with Baby Step 2. We are completely debt free. Oh, congratulations. Thank you. It's very exciting.

I'm really happy to be there. but I have about $4,000 from that child support money that we said we'd never use. And I'm wondering if I should just pay it back like a debt and just keep going like if we were on Baby Step 2 or the connotation of the child support money in the first place just killed me and I don't know what to do about it. So this guilt, Sarah, I'm just double checking that the facts are correct.

you didn't use this money immorally. It was more of a conviction that you personally had with it because of who it came from and you just, the thought of using it just feels gross and you had to use it at one point. But from a legal standpoint,

you used it exactly how anyone else would use it, right, to help run the household because you're taking care of a child and that other parent is helping with that, correct? Exactly. Yeah. And what was the court order? How much and for how long?

Um, it was, originally it was until he was 18 and it was supposed to be $430. Um, the only money that I've actually seen from that is the COVID money. Um, I was able to get his COVID check. I didn't know that it was coming. Um, my husband, um, adopted our son when he was four years old, everything finalized. So that's when the child support stopped. But there's so much arrears that, I mean, I will still randomly get like a 12. check.

Okay, so it's over, essentially. You're not getting future payments. You just have this kind of savings sitting here, and you feel like I don't want to touch this money because it feels weird. Yeah, how much is in that account? In the account right now is 2000, and I used four of it. Four of it. And what are you going to do with it eventually?

Are you going to give it to him when he's 18 or help pay for a car when he's 16 or college or what do you think? That's what we were thinking. just a car or something like that. Like I said, my husband's been around since my son was six months old. So my son doesn't know. He doesn't know any different as of right now.

And eventually we're going to tell him. I mean, we have to tell him, but we're just not there yet. And he's not emotionally mature enough to be there yet. Sure. Okay. So what I'll speak to, I'll speak to the money side of it, Sarah, from the sense that no, this is not a debt that you need to pay. I mean, you're, you use the money essentially how the system works and, you know, you use it exactly appropriately. And I know that doesn't sit well with you because of who it's coming from. And that, that totally makes sense to me.

But I think kind of the quote unquote debt going forward, which is not a debt, but is to say, okay, how can we best set up my son to have a life where he, from a financial standpoint, understands, understands money, doesn't have to walk through this debt-free journey. And we're setting him up in order to do that. And that looks like things like maybe college or helping with his first car, you know, whatever that may look like for you guys. And for me, I wouldn't, I wouldn't hold on to that emotional $4,000 anymore. because I think you need to release that.

But I think going forward, the motivation now is to pass a great legacy onto your son, right, regardless of $4,000 or not. So I totally understand how that can feel like, oh, my gosh, we use this money and it feels so gross. And I hate it because I don't, he's a terrible person. But, you know, you guys were in a pinch at the time. And that's what that money's for is to help take care of your son. And that's what you guys did. So I would let go of that because emotionally, I think it, I think,

it is holding on to you so deeply. Yeah. So in the filing cabinet of your brain, we need to refile this instead of child support money from an abusive awful relationship. This is changing my family tree money to set up my child for a better life than the one I experienced.

Yeah, and Sarah too, you know, give yourself a little bit of grace. You know, if this was a $60,000 thing or something and you were like, oh my gosh, you were supposed to use it for a down payment on a house. Or you know what I mean? Like a, I feel like like a lot of this magnitude and weight from a dollar standpoint, I feel like we could go at it a different way because I could

see, you know, the more money it is, the more weight it feels, right? So, um, yeah. So with this 4,000, yeah, I, I want you, I want you to release it for you, Sarah. Again, it's not about the dollars at that point. To me, it's, it's, it's that emotional attachment that's still there to him. And I, I, I want that, I want that release from you, you know? So, um, whatever that looks like. Yeah, I would have a goal for this money instead of letting it just sit there. It's only going to make, you know, reopen the wound. So I would put it in a 529 plan for college. I would put it in a savings account for a car fund one day because that day is going to come and these things cost money. And this is part of the deal. And, you know, there's a shared burden because that person was a parent and this is

what the court ordered. And so I would, it's hard to just say, release the guilt, Sarah. You're doing great. But that's the truth of it. It's, it's that hard and it's that simple to just go, all right, it happened. That was the past. And I'm going to make a better future for my kid now. And it sounds like you guys are thriving, and this child is so lucky to have you, too. Yeah, he's definitely blessed. My husband is literally a godsend, and he took him on like his own. And like I said, nobody knows. There's a couple people like family knows, but he doesn't know.

And my husband stepped up in more ways than I could ever even pray for. Well, and give yourself to so much credit, Sarah, because we talked to so many people on this show. and women specifically that are in a situation and they just they don't feel like there's a way out and whether from its financial type abuse where you know a husband's withholding and not allowing controlling yes to physical emotional I mean you know you can fill in the gaps and so spectrum is wide and to break that cycle is so so difficult and as dr. John Deloney says who works with you know so so many people in this area says that there's it's rare to have someone actually break it

So when you do, it is a, it is a, something to be celebrated. It's an applause. I mean, it really is, Sarah. So, I mean, I just commend you for that. I know that was 12 years ago, but that is, that's incredible, absolutely incredible. Yeah, George, when we, you know, think about part of the baby steps and what she said, I loved, because, yeah, it's baby step, you know, they're past baby step two. They're moving on for that fully funded emergency fund and so forth.

And there, there is something so freeing from the sense of, yes, the dollars and cents are there, right? we're being wise with our actual tactical money that's you know very important but it's so much bigger than that it is like the place where money sits in our lives the value of which we give it and when you are out of debt you have that emergency fund it's you don't have to be obsessed with it you don't have to stress about it because you're setting yourself up so well and what that speaks to your kids in a household is everything like to me that is that's part of family change changing the family tree it's not just from a from a monetary standpoint but from an emotional standpoint that money to be a stress point in our lives because we have control over it. Yeah, and there's a lot of

belief there. People think there's some sort of like financial DNA that you're born with because of the environment and place and parents. But we're proving it with Sarah that you can break chains. You might be the first one in your family to become debt free, to create a better life for your kid, for your kid to go to college debt free, for you to have a home that you own free and clear, for you to become a millionaire. And it's something you get to choose, and it's a daily choice. And it's one of the hardest patterns to break because of all the shame and guilt from the past and your belief system is so tied up. And you talk about this and know yourself, know your money. The different money classrooms you grew up in, it really shapes you. And you

have to really try to break all of the bad stuff to get to the good stuff. Totally. Yeah. Yeah. And as parents, you know, whatever you can do, you know, we always say more is caught than taught. But from, again, that standpoint of money, we're going to get in control of our money because, yes, from a monetary standpoint, we need to know where our money's going. We want to be debt-free. We want to start investing and letting the math work for us, like all of that. But more importantly, realizing that money's a tool. It is a tool to create a life that you love. That's what it is. It is not good. It is not bad. It doesn't have morals. And so how can that lesson and where money is placed in your life and in your heart and your identity? What your kids see, that speaks louder

than words. This is The Ramsey Show. The calendar might have flipped, but the way to win with money hasn't changed. Living on a budget, staying out of debt, and building wealth intentionally. Now, here's the deal. Most banks make their money when you don't do that. They're fine if you stay broke and frustrated. And that's why I recommend Fair Wins Credit Union. They actually want you to win with money.

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Fairwinds is federally insured by the NCUA. Welcome back to the Ramsey show. One of the best ways to spread the word we have found. not just in marketing, George, it is word of mouth. It's you guys sharing the show on your social media, sending clips to your friends and your family, and just really getting the word out that way. So we really, really do appreciate it. So make sure you do that. Leave a review, subscribe to our channels, podcast, YouTube, and yeah, we really appreciate it. The show, it's grown so much, which we're so thankful for. And it's a lot because of you guys.

and we want to help give content into the world that is positive and instructional and inspirational. So that is what's your way to give back. This show is all about. And it's your show. So give us a call at AAA 825-5-2-2-2-5. Up next, we have Elise in Little Rock. Hey, Elise, welcome to the show.

Hello. We bought a property three years ago, and the property owners committed fraud. They withheld the fact that the, Well runs dry about half of the year. Oh, gosh. Feels like a problem. It will cost $24,000 to drill a new well or $30,000 to bring in city water.

My husband wants to spend our emergency fund on the well, but I don't think it's an emergency because we've lived with it for three years. We spend about $80 a month on laundry and we're debt-free besides the mortgage. My husband works full-time and makes $60,000 a year. The other option is we could buy an old well-drilling rig for $4,800, but we don't know if there's any major issues with it. And then we could buy a brand-new well-drilling rig for $22,000. We have $11,000, $11,000 in our emergency fund. but once it's fully funded, it will be 18,000.

So you don't have the money to cover this anyways, even with the emergency fund, if you did the 24K or 30K option? That's right. And nothing in the, was there a lawsuits because of the fraud, anything legally that they had to pay you guys because they didn't disclose it? We are still in the process, but we do not believe that we will probably win the case. we don't believe we will get the money to cover it. Why?

Because we believe that she doesn't have the money to pay us back for it. Okay. Okay, so how long, Elise, would it take you guys to save up the extra $13,000 to make this a possibility for a $24,000 fix? We have saved about 11,000 in the last four or five months. Okay. So it'll take us another six months probably. Okay, to do that. And you don't want to do that.

That's not because you're good with how you guys are functioning now? Because, I mean, I guess if the well runs dried, you guys have water? I mean, like, what does life look like on the... Is this a little house on the prairie? How does this work? Well, I do laundry at the laundromat. um i can only do one load of dishes a day um and then either it kind of sounds miserable is it is very miserable okay yeah i would probably save up and get this as an emergency

yeah this is kind of a necessity you know your four walls food shelter utility it's not life or death but it's pretty close well i'm worried that if we um spend our emergency fund on this of another emergency will pop up and then we have no money Well, I mean, that's always a risk. Most emergencies, for the most part, you're able to get by with a couple of $1,000. So maybe you guys save $28,000, have $4,000 left over just for a little bit of cushion. And that'll be a few extra months, right? So maybe you give yourself a deadline and say, okay, but in eight months, we're going to fix this well issue.

Do it and still have some cash left over. And then keep saving because sometimes when stuff comes up, I mean, just like this, this is a great example. You know, yes, we would consider this emergency or people have, you know, a tire, you know, goes flat or you can fix that for more than, less than, less than $4,000. I hope so. Yeah, but like a roof or heating and air, things that are like really, really, really expensive. Usually, you can buy some time and be able to save month to month. That's what I'm wondering. Is there a temporary fix? Let's say you bought the used rig.

Do you guys know how to do this yourselves or will you still pay someone to actually do the work? We could do it ourselves. Wow. If you feel capable. Are you guys, like, do you know how to, like, is something that's like oh yeah that's a totally possibility and your husband's like yep for sure it just seems complicated yes my yes we could for sure do it and we have a friend that has actually built a well drilling system in the past okay then i feel like you go this route yeah why wouldn't you do that route um it just makes me nervous to buy something that we're not positive would work and why why wouldn't it work just because it's a used old i mean it's in 1980s city's truck that has an old well drilling rig that hasn't worked.

Can you test it somehow? Yes. Or have someone inspect it? Are there other ones out there that you guys can rent for a month? We cannot. I've looked everywhere. There's no well drilling rigs for rent. You'd have to buy either a new or you'd have to find a used one somewhere.

And most of them aren't big enough because we are drilling through rock. And most of them, most of the. ones that you would buy for 20,000 would drill through sand or gravel, not solid rock. Okay. I feel like George and I are probably not the... Beyond our pay grade, talk about drilling wells. I know. But if I was in your shoes and I felt comfortable and capable, I would inspect it, make sure

it's mechanically sound, and buy the used one because that's what you can afford right now. And later on, if that buys you time even to save up 24 grand to do it officially and or get the city water, I would do that down the line. But for now, I'm willing to drop five grand to see if we can fix this problem and remedy it, even for a year. And it's only $2,400, right? You said $4,800 for the used one? There's a used one for $4,800.

Talk them down to $4. Negotiate them down and see if you can get this thing going. Because there ain't, I mean, there's not a lot of buyers because apparently there's not a lot of ones out there. And maybe you can sell it once you're done with it and make some money back out of it, right? Yeah, we've also thought about using it around here locally because there's only one well-drilling company. Hey, you got a new business on your hands. Yeah, there you go.

Yeah, well, I hope that helps Elise. So, yeah, maybe do that. If you feel capable, I don't know why I didn't have that as an option. It's impressive. Elise and her husband. Well, my first thought was if I would just go drill myself. I mean, I mean, George with his, with his tools, with his tools, George can figure it out. See, I think your husband Winston could figure it out.

I'd drill him well. I'd call Winston. Yeah, you two together. I just felt like it would work. That would be a TV show. I know. So great. Okay, up next we have Andy in Miami.

Hey, Andy, welcome to the show. Hi, Rachel. Hi, George. Huge fan here. Thanks. How can we help? So, I currently work for a bank, and you guys may not like it, but I underwrite commercial real estate loans. We'll still be friends, Andy.

Thank you, thank you. At least not personal loans or residential mortgages. There you go, see. So work from home setup, base salary is around 113 plus some other little perks, a 20K bonus. They'll give me $2,000 towards my 401K, just because every year, and about $1,000 towards my HSA. Fully remote, love my bosses, they love me. about four years in and then I got a message

from a recruiter on LinkedIn about a trade finance type job. Sounds interesting but very, very far away geographically about an hour to 80 minutes each way per day, Miami, Red Rage Capital of the World. So I was like,

I'll tell this guy I'm open, he's going to say 120, I'm going to say thanks, bye. He says 150 to 180 plus 20% bonus So my interest was piqued there, and I'm just kind of weighing the pros and cons of flexibility. Where are you guys financially? Do you guys have a lot of debt? We are recently on Baby Step 3. I just finished FPU at church, co-leading it two weeks ago. And you've got a spouse?

Have a spouse, two kids. This is a move. May not be done with the children. Yeah. Mother-in-law, who's been a huge health, is about two miles away. Oh, man, that's tough. That's a big life change. Yeah, I don't...

Unless you plan on moving, I wouldn't do the hour commute. It's not worth the money. It's two hours in the car. I try to make more doing what you're doing now and stay put. Have the peace. You've set your life up to have peace. I don't know if I would do it for the money. That would be tough.

Thanks for the call, Andy. Thanks to you, America, for listening. Thanks to everyone in the booth. My co-host, George Camel. This is The Ramsey Show. I'm going to be able to be. Oh. Welcome back to the Ramsey's show in the fair winds credit union studio in the Fairwinds Credit Union studio.

I'm George Camel. Joined by my friend, my friend Rachel Cruz this hour, AAA 825-5-2-2-25, is the number to call to join the conversation. Andy is down the road in Nashville. What's going on, Andy? Hey, not a whole lot. How are you guys doing today? Doing great.

What's your question today? Awesome. So my question is I recently purchased a home, and I've accumulated quite a bit in debt, which I know you guys practice again. And so to try and mitigate this debt, I'm thinking what I'll do is I've got a house on the property and a shophouse on the property. What I'm really looking to do is to move into the shop house and rent out the bigger house. But it seems like some of the people I've got that are close to me have advised against this.

And, you know, I'm just, I wanted to ask the pros and they listen to the show. I'm excited to hear what you guys have to say. Okay, so give us some numbers, Andy. How much are you in debt? I bought the house for $250,000,000, but about $30,000 down. So I've got about $220,000 roughly. Is that your only debt? Is just the house?

Yeah, so actually I sold both vehicles that I had at the time, and now I'm driving around and beat. years. So, yeah, that's my only debt. Okay. It sounded like you had, like, racked up some consumer debt, but it's just the mortgage? It's just my mortgage, yes. Okay. And how much do you make a year? Roughly $130,000 a year.

Okay. And is the mortgage payment overwhelming to you, or you're just wanting to do this just to get the house paid off as quickly as possible? So I make the house payment in less than a week. But the main motivator for why I'm doing what I'm doing or thinking of doing what I'm doing is because I'm a truck driver and I just don't make it home a lot. I'm only home about two days a week. So I'm trying to, yeah, I've comped some similar properties in the area

that are being rented. And, you know, I could basically come out even if I rented that and stayed in the shop house. I could have my bills paid for for free, basically. How much is your payment a month? It's around 1,500 a month. Okay. Are you married?

I'm not. We're getting there. Okay. Does she want to live in the house once you get there? She, so we live in the house currently, and she doesn't want to move out into the shop house, even though I think it's nice enough for us. I don't think that it's up to her standards necessarily.

Yeah, I mean, you're not making it sound super enticing. I'll say that. You say shophouse. It doesn't sound like a place where a person should live. So. Well, it's like an apartment. If you could imagine a little studio apartment, it's something of the nature of that, but it's beyond livable.

It's nice, in my opinion. Okay. Well, and she's the girlfriend. She's living there for free, I'm assuming. Yes, man. Okay. So I wouldn't want to live in the shophouse So if I was living with my boyfriend

And he's like, you got to go to the shop house Because I'm renting this out I'd probably be like, great, I'm going to go rent an apartment And right, like she needs to do what she needs to do There's some relational risk here I don't want to make the decision based on the girlfriend If it was your wife, I'd be like, Andy, Andy, Andy But it's a girlfriend

Like she doesn't have any skin in the game It just feels like this is not worth the juice isn't worth to squeeze on this. You don't need to do it. Nothing's on fire. You have a great income and a very reasonable mortgage. Why not just continue on? What's the actual financial problem? Well, as far as the financial problem goes, it's just the fact that I've signed a 30-year note on this house, and I'm thinking of all the interests that I'm going to pay. So pay it off early?

Well, I thought about doubling up the payments when I live in the shop. house and then we could see each other more as well because I'm only home two days a week right now and that you know so could you double the payments now while still living in the main house I probably could yeah the only downside I would think is that if are you wanting this house long term Andy like do you see like it'll probably be with you for a while I just I always it feels a little weird to have people living in a house or two you know two or three different families or people, and then you go back and move back into it. Does that make sense? Like, I don't know, it's, um, so. It just doesn't feel like any of this was intentional. It's just sort of like,

well, I could do this. And your family's steering you against it. Why? What is their big qualm with this move? They're steering me against it because they know that I can afford it as is. And no one in my family has ever rented out a property before. But the way I look at it from a financial standpoint is if I live in the shophouse, double or triple up on payments, I can turn a 30-year mortgage into a, you know, a three or four or five-year mortgage. Sure. And then I can be off the road at that point as well. So for me, it's making sense from a lot of different angles.

Yeah. I'm not mad at it. I mean, I don't think it's necessary. I don't think, like what George said, I don't think this is an urgent move that if you had called and I would have been like, oh, you have a shop house, great. you should live in that to rent out your main house. That would not have been my advice to you anyways. But if you want to do it,

I mean, that's up to you and you'll make extra payments. But you're just got people living in there. And then something's going to leak and break. And then we're calling you on the road. You're going to have to, you know, figure out, okay, I got to get a plumber down. I mean, there's legit. It's not hassle free.

Yeah. It's not just easy money. Right. And I think a lot of people think having a rental, there's like it's passive income is what everyone says. And it's, there's a level of a, responsibility you have, that you have to be on call, you have to be willing to work with these people, whoever's going to live in there. But one thing I do like, Andy, is that you're

not desperate, because then you can actually probably go through an actual. You'll take worse tenants, make worse decisions. Yeah, an interview process and get some good tenants. And you know what I mean? Like, you're not in a rush. So I would never suggest you do it. I don't think you need to. But if you want to, then do it. And then... I don't think it's going to break you, but I don't think it's going to be the sweet, sweet free money that you're envisioning either. Okay. So, do you have savings in the bank?

Do you have an emergency fund? Yes, sir. How much? I've got roughly $35,000. Good. You've done really well. Yeah, Andy, well time. I'm proud of you, man.

Seriously. Thank you. I just think I would set a goal for myself where I still get to live in my own house and then I make extra payments. And so figure out a way to do that. and I think you'll cut your mortgage in half or more just on your own volition without ever becoming a landlord. Okay.

That would be my goal. That's great. And once you're married, if she's working, she'll add to it too. She'll help knock down that mortgage if you guys are both working. I don't know how she's going to like that idea. Of her working in the future? Is she working now? She is a gym coach for little girls,

and they actually went to the Junior Olympics. this year so that's sweet you know that was really nice so i love for her to follow her dreams do you think i can make the team well you could try i think she'd be happy to work with you she likes anybody she's good with people that's sweet she sounds like a keeper man best of luck to you with this decision it's not an easy one i wouldn't take it lightly but i think you have a good game plan here of just figuring out how to do this without becoming a landlord for now good luck Everywhere you turn right now, that you're being told a lie, that you can't get ahead, that you can't survive without debt.

And those lies are keeping you broke. Don't buy into it. Yes, there's a lot of noise and chaos and confusion out there, but there's also hope. The truth is, you have more control than you think. This year, it's time to take back your hard-earned money and your life, and it starts by joining our free live stream. On January 8th, me and Jade Warshot will show you how to go from chaos to clarity with your money. Help you break free from debt and change your family tree,

all by using the all-new Every Dollar app, plus 10 people who sign up will win $2,000 cash. Don't let this be another year of I Can't. Sign up for free at Everydollar.com slash live stream. Welcome back to The Ramsey Show. I'm George Camel, joined by Rachel Cruz. Open phones at AAA 8255-225. Well, Rachel, we got a lot of questions about investing. The social media world, the young people, all they want to hear is about how to build wealth. And it can be overwhelming. It's great. Great conversation to have. But there's so much noise out there. It can be overwhelming. You can get sort of paralyzed,

the paralysis analysis. And a lot of people end up doing nothing because they're scared of doing something, but doing it incorrectly. And so I want to set them free today with some teaching on this on kind of the primer for building wealth. And research has shown that a lack of confidence in making these decisions, it's a primary reason why people don't invest. So we just need to bring them some literacy and some hope that it's way easier than they think. So here's what we're going to call it. Keep it simple, stupid. You ever heard of that, the kiss method? That's what they call it back in my day. So investing is a long game. You're not trying to time the market and buy single stocks. You don't need to be a prodigy. And everyone is a first time

investor the first time they invest. That's right. So it's a very. So it's a, okay. But before, there is a prerequisite. If you know the Ramsey plan, you've got to be in the right spot in the Ramsey Baby Steps. So we've got Baby Step 1, start our emergency fund. Baby Step 2, paying off all the consumer debt. Baby Step 3, fully funded emergency fund. Then comes Baby Step 4. Investing. Yep. Make sure you knock those first three out. Otherwise, it's going to be much harder to invest. You're going to add a lot of risk and stress into your life. But once you're there. And even those who are investing now and still have consumer debt, when you're paying off debt, we would even say to pause investing too. So truly those first three steps are just like one at a time. You're

doing nothing else but those. But then you get to babysat four and you get to start you get to start investing. It's funny. You start building for the future instead of paying for the past. Yep. So this is where it gets exciting. Yeah. So the first thing to really think through is what are your goals? What are you wanting to invest for? Are you investing for retirement knowing I'm not going to see this until I'm 60 years old and I'm putting money away because I'm going to, you know, I want to retire at 60 and be able to cash everything out and be great, or not cash everything out, but live off those investments. Is it that you want to maybe open up an index fund or a mutual fund and put some money in month to month because you're looking out in the future and you're like, yeah, we'll probably

be putting a down payment on a house maybe in four to five years. I don't know, but I want to be able to get to that money without penalty. So, you know, I'm doing that. Is it kids college? Are you investing for kids college in a 529? So again, mapping out why you're investing and kind of what those goals are will help really take a really broad subject and narrow it down for you to know what lane you're wanting to invest in. And that Y will keep you focused and eye on the prize instead of sort of getting a little starry-eyed or pulling your money out when you go, oh, no, this is for this purpose. Yeah, because just so you'll know, we define investing as five years or later, right, or longer. That's investing for us. Savings is more short term. You're saving

for something in the next month to three, four years. But when you're talking five years or more, that's where you're like, okay, we can start thinking about this investing idea. That's because there's less risk for you to lose money in the short term versus long term. We know you're going to make it if you do it the right way. So the next step, once you've decided on your investing goals, you've got to figure out how much you're going to invest. And your goals will determine this, but we recommend a baby step four putting away 15% of your gross household income into tax-advantaged retirement accounts. So simply put, this would be, I've got a Roth 401k at work. I'm going to put 15% of my income. My spouse will put 15% of their income. Together, that's 15% of household

income. Yes. That's a question we get a lot. Wait, do I do seven and a half and she does, nope, because 15% of yours and 15% of hers becomes 15% of hours of the total. So that makes it real simple. I love that 15%. Don't overthink it. You don't need to do more at this point. You don't need to do any less. Keep it there and don't stop. Yes. And then also understand your investing vehicles. So you're just saying that, George, so when you're thinking about retirement, you guys, do some research and figure out, okay, at my workplace, do they offer a 401k or a 403B? These are great investing vehicles to be in, or is there even a Roth option within it? Because Roth means that it's after tax dollars and the growth is tax free when you take it out, which is huge. So if you

ever see Roth, jump on that train. Love that, that's a good one. Or maybe, you know, you're doing a Roth IRA, you know, which is another great place to put your money, a really simple investment, honestly. And anyone can do that with earned income. So that's a good clarifying point. You're like, my employer doesn't have an IRA.

That's outside of your employer. That's right. So 401K, 4-3B, those are employer retirement plans. The IRA anyone can do if they have earned income. It's up to, I think, $7,000 this year in 2024 that you can put in. limit it. But again, that's another one. And so you guys, you can sit down with somebody, a smart investor pro or someone to open up, you know, especially like something like a Roth or mutual funds or other things. But, you know, you can also go to Vanguard and say, okay, you know,

looking into options. I mean, like there's, there's ways to do this, but just know when you when you open up an account, which again, if you sit down with a professional, which we recommend, they're going to help you with this. You actually have to invest the money because that's a mistake people make. They open up these accounts and they may put money in the account, they don't go and take that and actually invest it. You need to buy funds with it. That's right. There's an extra step there. So just remember that. It's just like a shell. You've bought, you have a shell, but now you need to put some stuff in there to allow it to grow. So that's where it comes into choosing different types of investments. We've all heard of stocks and bonds. Our favorite

of these is mutual funds or even index funds. The word fund is the key here. A fund is going to hold a giant basket of those stocks, which helps you diversify and it doesn't put all of your eggs in one basket. And we may be beaten a dead horse, as they would say, George. But again, we're getting very simple here with this. Just so, but we want you guys to know this. Yeah, George does. He loves horses. Don't ever sell the horse. A live or dead. I wouldn't touch one. Oh, my gosh. Is within these accounts, your 401k at work, a Roth IRA, you're investing in mutual funds within that account. So just to be clear on that. Yes. And so the next step would be picking an investment strategy. And we've mentioned that good growth stock mutual funds, that's the way to go to invest for the long term, consistent growth.

You're spreading that out among a lot of different companies. And even then, we recommend four different types of funds. And so we'll tell you more about that. I'll give you a great resource to check out. But the key here is diversification. That is why we do this. That's right. And then next, that'll be opening the account, kind of what we were saying earlier. So you're going to go and talk to your employer at work. And then you're going to do, remember this formula, Roth, No, wait, match. Hold on. Oh, no, I just messed it up.

I messed it up, George. Roth. Nope. Match. Start with the match. Thank you. My gosh. Match beats Roth beats traditional.

We got there. Oh, Lord. Five words. On my soul. Match beats Roth beats traditional. So remember that formula because that's going to help guide you to say, okay, what should I do first? So again, go up to your match and your 401K.

If there is one. If there is one. And so say it's 4%. Well, you have 15% you got to invest in. So you're going to put that. So that means you have 9% of your income left to invest. That's when you're going to go over to a Roth IRA fund up to that. 11% if you max that out.

Yes, good Lord. It's okay. The cookie is messing with her. I mean, I get an Americano, I get a chocolate chip cookie, and I go downhill. That's right. 11% left, go to your Roth. And if you max it out and you have more percentages left, go back to your 401K. But the beautiful thing would be a Roth 401K.

That's what we have at Ramsey. And so for a long time, that's what I was just. doing. It's just Roth 401k, all 15%. We've got good mutual fund options. That's the key. Hey, should I do all 15% of the 401K? Yeah, if you've got good options and low fees and it's a Roth, go for it. Yes. So that, it's simple. Match beats Roth beats traditional. And again, this is regardless of the employer match, you were doing 15%. You don't do less because your employer has a match or they give you free money. Even if they give you a free 4%, you still do 15%. Yeah, that's right. So the next step, the final step here is working with a pro to start investing

to keep learning. Rachel and I both have a smart vester pro in our corner, as we call them. And the key here is you want someone in your corner who can educate you, who has the heart of a teacher, who can maybe help you avoid jumping off the ledge when the market's crazy, help you understand the trends that are happening, and give you a full plan, not just with choosing a fun, but what about estate planning and tax strategy and kids college and making sure you have a holistic plan? Yeah, because in our world today, I mean, there's some stuff. I mean, Vanguard's a great example that you can do on your own, right? I mean, very much so. But Even if you do that, you guys, having somebody in your corner, and this is what Wednesday I do, we meet every January with ours to look at everything.

They're looking at your entire financial life. And so I think that's so, so important that you're not doing this on your own because if you're making big decisions to have somebody that's, yeah, from the tax standpoint, all of it, all of it. Just they're seeing your entire financial picture, I think is really, really important. Get that third party in there. So if you want to learn more, we've got a great article that will put in the show notes in the description that explains it all. It's called how to start investing. and it's on the Ramsey Solution site, so go to the show notes, click the link in the description, and it's all free. We just want to help you guys build wealth with peace and confidence.

I'm going to go drink more coffee, George. She needs it. This is The Ramsey Show. Hey, George Camel here. So you're thinking about buying or selling, your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love?

So if you're ready to take the next steps toward your home goals, go to Ramsey Solutions.com slash real estate. That's ramesysolutions.com slash real estate. Welcome back to the Ramsey Show. I'm George Camel, joined by Rachel Cruz, and in the Ramsey Solutions Lobby on the debt-free stage, we've got some new friends, Nicholas and Devaney. guys. Hi. Hi. Thank you for having us. Absolutely. Where are you guys from? So we're from Kalira, Alabama, which is about 30 miles south of Birmingham. Wonderful. And all the way here do your debt-free scream. How much did you guys pay off? We paid off $232,000 and $200. Wow. And how long did that take? Four years. Nice. Wonderful. And what was the range of income during that time?

We started at $82,000 and then up to $163,000. Whoa. That's incredible. What was the big jump. Well, our buddy Ken Coleman would be proud. I took full advantage of the great resignation during COVID. Ah. Nice. So we didn't have that big of a shovel or not as big as we'd like. And so I just went

job searching. And in less than a week, I found a job and it doubled my salary. Wow. Oh, my gosh. So are your one-income family? Sort of. Sort of. When we paid off the house and she can go deeper,

into it in a minute but when we paid off the house she wasn't the happiest at her job and I said you know what I'm paying off we're paying off the house today you can put in your two weeks Oh my gosh okay so the 238 was the house Well it was credit cards

car loans student loans and then the house Everything and the house Congratulations you guys That's incredible That's wild Okay so four years ago you guys had some credit cards You had the mortgage you're living normal

What happened to get you on this Ramsey journey. Well, if you look back at it, that's right when COVID first hit. And, you know, we had friends, family, you know, we just kind of saw people, you know, struggling. And then, you know, you turn on the TV, you see people losing their jobs, losing their livelihoods. And we thought we were safe, but we just kind of said, what if, you know. And then we dug deeper into our finances and we were like, wow, we're in a mess. And so we started chipping away at the credit cards. We did side hustles. She was making, she started making like hair bows for little girls selling those. I did DoorDash for a while and we started selling stuff just around the house.

And Rachel, you'll relate to this. Any old kids toys that we could find that were in one piece. Yeah. We put on Facebook Marketplace. Good for y'all. So we just made it happen and did whatever we could to get out. Dang. Wow. So there's sort of a pandemic panic. And you guys went, we could be just like those guys three seconds from now. Let's get our affairs in order here. Yeah. And prior to COVID, I was working from home anyway. So like I was safe, but I always think the worst thing is going to happen. So I'm like, what if I lose my job? What if we both lose our jobs? Sure, sure. And so we're like, we need to get out. It's amazing how you can carry that risk of debt for so long and until something really shakes it like a pandemic or something do you

realize oh gosh it is risk like these car loans like all this debt that we're carrying it is a level of risk that some of people are used to but the moment you start saying wow this really is a part of our lives that we want out it's it's incredible absolutely and she's you know i'm the saver so it wasn't hard for me to get on board and she's the spender and so you know she's the one where it's like every day in amazon boxes totally the amazon The fan lives at our house. Stephanie, how was this for you, this four years? Was it hard?

Was it once you got on board and you guys were working together, you're seeing the progress that was good, but like how did it feel overall? Yeah, I mean, it was definitely a little different at first, especially because right around that time our daughter was born and I had my first daughter, and of course, I wanted her to have all the cute girl things and all stuff like that. So it was definitely hard at first, and then I stopped. I was like, okay, like she doesn't need this. And then I started, like Nick said, I started making bows and stuff for girls' hairs,

and she did not like them at all. She wouldn't keep one on her head. So I was like, okay, there's no point to buy this stuff. So I definitely got there. It took a little bit. But once I started, then I was like, oh, like, this is great. Oh, my gosh. Did you guys know about Ramsey and the baby steps at this point?

How did you find out about this? So I just, when the pandemic first hit, you know, pretty much just Googled, you know, getting out of debt and how to, you know, how to clean up this stuff. And then I bought the Total Money Makeover, Reddit in one weekend, I think. And then we just kind of just snowballed from there. Literally. That's amazing. That's incredible. Yeah. So great. Okay. So what would you say to a young family that's listening and they have the car loans and the credit cards and they're just normal, live in life, but they're feeling like, oh my gosh, we want to change. What would you say the key of getting out of debt is? Yeah, I mean, I think for us,

I mean, you look at us, we're in our 30s and we did this, you know, we hear people all the time, younger people, it's harder to live these days. You can't buy a house. You can't do this, but they're also hundreds of thousands of dollars in debt. And it's like, well, control what you can control. And so, I mean, I mean, Rachel, you know, you were born the year your parents filed for bankruptcy. George, you went from negative net worth to a millionaire in 10 years. You look at us. We both grew up in less than ideal situations. Her parents got divorced when she was young. My parents got divorced when I was young. My dad passed away when I was eight years old and he didn't have any life insurance. And so I was raised by a single mother. No help. Just trying to figure

it out. So if we can do it, anybody can do it. So good. That's inspiring. And it's just the belief you can. Yeah, absolutely. And that's it is to believe that you can. That's incredible. And in your early 30s, on your way, and Baby Step 7, what's the house worth? So, well, we bought in January 2018 right before the housing market just went bonkers. Good time to buy? Yeah. So, I mean, we paid less than $200,000 for our house, about $190, and there's homes in our neighborhood selling for over $300 now.

Wonderful. That's incredible. And so you got that paid off, and you've been investing in retirement? Yeah. Yep. Yep. So now we're doing 15%. We're still trying to save up for the kids college and all that. And we're also cash flowing in international adoption right now too. So this is not our complete family. That's great, you guys. Yeah, we were hoping the adoption would be finalized when we came here.

But it just kind of, you know, worked out this way. But yeah, so we're doing that, saving up for the kids college investing. And, you know, we were at a negative net worth, a significant. negative net worth four years ago, and now we're on the path to be multi-millionaire. Oh, my goodness. That's unbelievable. And when you have the margin to do things like you guys get to just cash flow this adoption with joy in your face instead of stress because you've also got payments. So I love what when you turn money from an obstacle into a tool, it's amazing how your life

changes. And I'm so proud of you guys for being a living, breathing picture of that. Yeah, absolutely. And I told her, you know, she stuck with me these past four years, you know, and I know it wasn't the easiest thing. So when we paid off the house, I said, you know, you just pick anywhere on the map and we'll go there for a trip. So where are you going to go? We don't even know yet.

I'll bring a map out. Rachel's going to throw a dart. Yeah, we've talked about, you know, Europe and, you know, going on a cruise or whatever. We don't know. Yeah. We'll probably go on a couple trips, one with the kids and one which is us, too. Love it. I know, and you have the kids with you.

Yeah, bring them up. Yeah, bring them on up. So Brantley is our oldest, he's seven, and then Camry is four. Oh, precious. Look how cute. Well, I hope they've been practicing for the dead free screen. And y'all are all color-coded. With the lavender outfits.

They look fantastic for those of you they can't see them. Get a family photo after this is done. That is wonderful. Here we go, guys. We've got Nicholas and Devaney and Brantley and Camry. $232,000 paid off in four years. House and everything, making an 82. up to 163.

Count it down. Let's hear a debt-free scream. All right, Camry, you ready? You ready to lead us off? All right, go ahead. In the mic. Three, two, one. We're debt-free.

That might win the award for cutest debt-free scream I've ever seen. Gosh, I just teared up. I was like, oh, my gosh. What a performance. And we've got a special gift for you guys. Two every-dollar premium gift cards for a one-year subscription. You can use one. You can renew with that.

You can give it away to a friend to get them started on the journey. And George, and just hearing their stories of even the change that they've made from their childhood to now, what these kids are going to experience. It's absolutely incredible. In four years. Early 30s. No mortgage. It's incredible.

In four years. Well done, you guys. Well done. It's possible for you, America. Are you willing to make those kinds of sacrifices for four years? I can do just about anything for that amount of time. And I know you can too. It is worth it.

Look at that couple. look at that journey. This is The Ramsey Show. Hey, do you ever feel like you're doing everything right with money, but still stuck? I was you. In debt, running hard, but taking three steps forward and two steps back. Turns out, it's not the numbers. It's the fact that changing our ways with money is emotional. That's why I wrote my brand new book, what no one tells you about money, to help you push past what's really been sabotaging your progress so you can finally win. You can pre-order now and score over $100 and free bonus items,

but only if you order by January 5th, go to ramsysolutions.com slash store today. our scripture of the day psalms 3721 the wicked borrows but does not pay back but the righteous is generous and gives Benjamin Franklin said creditors have better memories than debtors some old school financial wisdom Ben Franklin he was doing well for himself

Benjamin Franklin you know the teeth the leg i don't know what else he had i don't know what i see it going on but he could afford it the what i don't did he have wooden teeth or something that was george washington oh dang it guys i'm not a historian listen i'm not a geographer i heard i hate to i hate to call you out george what you hear don't kill me but that you didn't know who margaret thatcher was oh yeah yeah yeah ken told me that and i thought oh no george the iron lady i didn't know this is stuff i'm well then ken called me out for not knowing what a chain gang is in football i was like why would i don't know what that is. Thank you. And you know football. Sort of. I'm like, guys, I was busy, I don't know, having a life. Is that a thing? Is that a thing? That is? It's the people who move the giant markers. Oh, but they call them a chain gang? They had to have a cool name because it's not a very cool job. I don't know. Guys, this is why I stick to money questions. I embarrass myself when I talk about historians and politicians and sports. I stay away from it all. I'll leave that to Ken Coleman. Well, the latest fact, history-wise, then we'll get to the phones. Picasso?

Yes. Found out. He died in 1972. Died in 1973. And Rachel was like, I thought he was with Leonardo da Vinci. I thought he was part of the Renaissance. I had no idea. Wow. He just died in the 70s, Picasso. I was like, what? I thought all those guys were back with assisting chap. Well, I don't know. I don't know. I'll just Google it if I need to know it. But until then, it doesn't sit in my brain. Sorry. In the 70s, Picasso. I mean, Crazy. Anyways, that's my fact. That just blew my mind. All right. Timeless. Timeless. All right. Let's get to the phones. We're better served there, Rachel, than talking about anything else. Ask us about 401 case. Let's see if we can help Timothy in Los Angeles. What's going on, Timothy?

Hey, guys, can you hear me? Yes. Loud and clear. Okay, awesome. Well, I try to describe my situation. So I got out of college in 2021 and just got married. and I had my associates, went to work for the past two years, and I'm currently making $20 an hour. It comes out to about like $37,000 a year after taxes and everything. We have a one-year-old daughter, and we didn't really have any debt, but then my wife's car broke down, and we decided to buy her a car last year. It was like $20,000 cash value.

and then that car broke down and our warranty covered us to get a brand new engine on it. So we had that and then I decided to start a business last July and I'm generating through that business after, after like in profit, I'm bringing in about half of my income that I make at my day job. Now, we did have about eight grand in debt because of that, starting the whole business and everything, and then we just used our taxes to pay that back, like, substantially. So now we only have about two grand in debt. Total? Yeah, well, well, besides the car. The car is like, we still are like $20,000 in the car.

So. And, yeah. Is your, you have the only income in the family right now? Yes, my wife's to stay-at-home mom. And the final thing was I was planning on going back to college this fall. And I get financial aid, so it'll probably be just as much as I'm making on my day job. But the only thing is, we just got news and we're expecting twins. Whoa.

Congratulations. Thank you. Wow. So. A lot going on. on here. Yeah, this is the thing. We live in a small studio in the backhouse of her mother's house. So it's already me, her, and our one-year-old daughter, now we're expecting twins. And previously, we were pre-qualified to get a house. We actually live in Bakershild. We were

pre-qualified to get a house for about $150,000. But now, you know, we, with the car, we don't even know We don't even know what we're going to do. Do you have any money in savings? We have nothing. We just started budging. I just started getting plugged in with the Ramsey show about two weeks ago, three weeks ago. Well, there's an order for you to become a homeowner, and it's when you're debt-free with a fully funded emergency fund of three to six months of expenses,

and you have a solid down payment. But until then, I'm not going to get pre-qualified. Are you paying rent right now, Timothy? Or are you in there for? No, her family's, yeah, her, yeah, she were living there for free. Okay. Yeah. The big question is, can you afford to continue living in California off a $40,000 salary?

Well, I mean, I'm not sure. Like I said, I live in Baker sold, so, I mean, it's a little bit lower living expenses in L.A. But what would it cost you to go rent somewhere that could fit your family right now with the twins? Well, small, small would be like $800, $800 a month. and then a little bit bigger would be somewhere along to $1,300 a month. This business you started, so you made $14,000 last year because you made half of what you make normally. Yes. So, well, actually, I just started last July.

So now I'm averaging about $400 in sales a week, and take home is $300 a week. Okay. After, yeah, after input and all that stuff. Okay. It's about $15,000 take home from this business. Yeah. Do you see it scaling? It's growing substantially.

It is. Okay. It's scaling really fast. So the reality, Timothy, I think is you're going to have two jobs. You're going to have this job that you're growing, which is awesome. And hopefully it just sky rockets. I mean, that would be the hope. And your day job.

And you're going to be working both of those, I think, for a period of time until the car's paid off. And this $2,000 loan until you guys get a good emergency fund. Well, no, you know what? There's twins in the picture. So we're pausing everything. So honestly, I would just stockpile cash at this point until the babies are here. And it's probably a high, is a twins high risk? I mean, like they're, you know.

So I just, I would be, yeah, so all that to say, I would just be saving a crap time. And once you. I would just be putting so much away. Honestly, I mean, like, that's, that's going to be your best bet right now. And then once the twins are here and everyone's good, then I would look at paying off this $2,000 business loan, paying off the car. I mean, the car is a lot. of your world. Yeah.

What's the car worth? Well, see, it was $20,000 cash value, right? Well, the engine busted, and they put a brand new right off the, right off the assembly line, a revised version of the engine, and it was about $17,000 engine. But I went to see if we can, yeah, but I went to go see the, if I, I mean, I did an online, like, little quote, and it only came out to like $10,000 or something, so I don't know if I did it wrong or maybe we should actually go into a dealer but to see what the price should be but I mean I mean after all that I just I just my wife and I we're willing to do what

it takes and sell a car but we're like is it a quality reliable car for the family and it fits all the kids yeah it's it's a nice car it's a Jeep Grand Cherokee um eco diesel and it's it's a really nice car so okay well for now kids I would work to just pay that off in the dead snowball once the twins are here get the emergency fund in place then you can think about going back to school and making sure you can cash flow that but i don't think now's the time no no do you think that if i were able to grow the business large because because it i grow sell and deliver microgreens so i'm only spending about about 12 hours a week doing you're saying if i did this full time it could replace my income yes that kind of thing right

With your situation, it feels risky. If you can get the boat close to the dock later on, and you're like, oh, my goodness, I could totally see how if I did this full time, I could make more than I'm making in my – because right now, you're making your full-time salary plus the side money. If you jump to the side stuff, you're just going to replace your original income. Yeah, yeah, that's true. You're still better off right now financially with your situation, and I would work to go rent a place. Really, your goal is, can I make $6,200 a take home to afford the $1,300 a month in rent? and I would make the jump to go rent at that place. Okay.

Hope that helps, Timothy. You got the road ahead of you, man. The twins alone, on top of the one-year-old, it's about to be a party. So wishing you guys the best and that. Also, what a sweet blessing. That's exciting. That puts this hour of the Ramsey Show in the books. I'm George Camel, joined by Rachel Cruz this hour.

Thank you to all of the folks in the booth, keeping the show going this hour. And you, America, we'll be back before you know it. Thank you.