The Ramsey Show - App - It Shouldn’t Be This Complicated To Gift Money

Episode Date: April 19, 2022

Dave Ramsey & Dr. John Delony discuss: When it makes sense to get a financial advisor, Teaching FPU while you're still in baby step 2, When you need long-term care insurance, Should you buy the house next door? How to best use money to care for kids. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, Dr. John Deloney. Ramsey Personality is my co-host today. It is book launch day at Ramsey. Own your past, change your future is officially on the market. You will find it in bookstores today. You will have it shipped to your home

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We help people build wealth, do work that they love, and create amazing relationships and mental wellness. And Dr. John's here to help with that part in particular today. 888-825-5225. Ryan's with us in Tampa, Florida. Hi, Ryan. Welcome to the ramsey show hey guys how are you today better than we deserve brother what's up um quick question for y'all

i my wife and i are recently debt free except for our house uh we paid off about fifty thousand dollars in student loans way to go um thank you uh We've got about three months' worth of expenses saved in the emergency fund. We're going to try to get closer to six months. My question is that when is the right time, or when do I really need a financial advisor? We've both got Roth 401ks with our company, and I've gone in and selected the funds that look like they've been doing the best over 10 years. So outside of that, you know, when do we really need to get a financial advisor? You got kids? No, not yet.

Okay. All right. Well, anytime you're going to do any more investing, you're certainly going to need the one. If you need to do something more than your 401k or different than your 401k, and if you're ready to start 529 for a kiddo, that's why I ask about kiddos, then you can do that. If you want to meet with a SmartVestor Pro now, they'll meet with you, and they'll tell you exactly what's going on, and you may not have a need to purchase a fund from them right now.

But it's okay to start establishing a relationship because they definitely want, you know, they definitely want to be available to you. They make their money based on what you invest with them. If you're investing zero with them, then, you know, you don't have a lot of need for one right now. And they don't have a lot of need for one right now but uh uh and they don't have a lot of need for you but uh but you know that's that that's you know you don't need a real estate agent if you're not buying or buying or selling a house right uh but it's not doesn't hurt if you're thinking about getting into the you know thinking about buying a house sometime the next year or two doesn't hurt to meet with one that kind of thing that's that's the way this works and so yeah you know uh if you want to hit ramsey solutions.com and click on that that's it's a good thing john there's a a huge advantage um in the multitude of counsel

there's safety uh the bible says and so putting people in your corner that are experts in different areas, subject matter experts, whether it's taxes or estate planning or insurance or mental health or investing, are there to teach you right not to um and not not to boss you right and so uh you you never want to say financially oh i can't do that my financial advisor won't let me that's absolute crap it's your freaking money yes uh my financial advisor advised me against it and i agreed with his advice once I understood would be a proper way of stating that. And I just got a call. I think I told him I just got a call from my financial advisor the other day who's one of the Ramsey trusted advisors. And he said, hey, this is what the market's doing. I'm recommending that we make this thing.

Here's why I'm recommending we make this thing. What are your thoughts on this? And I said, well, my response was, are you making the same deal on your personal thing? And he said, absolutely, yes. And I said, I understand why you're doing this. I trust you. I trust this process. So let's do it.

We're going to do it. But there's somebody who all they're doing all day is watching this stuff on my behalf, right? Because I might know the basics. I might understand what's happening. I don't have time to go in. That's why I hire them, right? So having an expert is so important. Absolutely.

Absolutely. Daniel is with us in Dayton, Ohio. Hi, Daniel. What's up? Good afternoon, sir. Good to talk to you. You too. How can we help?

Well, so I've got a question. My wife and I are considering leading financial peace at our church this coming summer. Wonderful. Um, we're just in the, about baby steps to looking to have the car, uh, paid off this week,

house in three to five years or so. Um, I'm just looking for like, uh, we've been following you for our whole married life for about six years, but I'm just concerned with trying to lead the class while we are in the middle of the steps ourselves just uh just kind of either encouragement advice or caution you may have with trying to do that no i would do it absolutely 100 absolutely

i'd do it um as long as you're doing the stuff we teach, you don't want to be a hypocrite. Why is it taking you six years? That's just the long end of the spectrum. That's your mortgage too, right? Is that your mortgage? Yes. Okay, well, baby step two doesn't have your mortgage in it, man. Well, I just think long term is everything.

But didn't you tell me you had been working on this six years no my wife we've been listening to you following you and then we bought our house a couple of years ago and then so yeah by the time we are free and clear of everything would be in the next three to six years house and everything work and bonuses bonuses. Yes, sir. Okay, I'm talking, I thought you said you were in Baby Step 2. Are you in Baby Step 2? Yes, we have our $1,000 and we are working on the rest of our debts. Okay, so how much debt did you have, not counting your home? We had a personal of about 12 000 and then so you

have not been working on baby step two for six years no he said they're going to be said he'd been following our stuff for six years we've been listening to you not really yeah okay all right you've been listening at me okay i got it okay so when did you actually start working on the baby steps uh about a year and a half ago okay better now yes please take financial peace what i was trying no what i was trying to ascertain daniel i was trying to figure out if you were issuing this or not if you're sort of kind of doing it because if you're going to go in and be a hypocrite, you don't want to lead it. Because I'm telling you, you'll have a hardcore Dave fan in there, a hardcore Ramsey fan in there, and they'll call your butt out, man.

So as long as you're really doing the stuff, as long as you're really doing the stuff, you'll be a great coordinator. It doesn't matter what baby step you're in. But just don't be hypocritical. That's what I was trying to dig into, how you're doing this six years and you're in baby step two still. So that doesn't make sense. But now I understand. You just started really actually applying the concepts that you'll be leading in financial peace about a year ago. That's perfect.

You're going to be a great coordinator. Thank you for doing it. And, yes, you should do it. Please. Thank you. Thank you. Please. Thank you.

Thank you. Thank you. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at its lowest point since the 1970s. After what we've been through the past few years, I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper and the whole process to apply is pretty simple with many companies not even requiring an exam anymore.

This is why I send you to Zander Insurance and I have for almost 25 years. They'll make sure you get the right protection at the lowest cost possible and they're there for you and your family every day. I challenge all of you to make sure your families are protected. It needs to be a top priority. Call Zander at 800-356-4282 or visit zander.com. That's 800-356-4282 or zander.com. I've got to tell you, we are so excited about the new book, On Your Past, Change Your Future, came out today. Another thing we're really excited about,

a lot of good things happening around here right now. We're back on the road again. We've got these live events showing up everywhere and uh including we have launched our first smart conference in several years the pandemic and the offset with the venues and man it was just been a mess and man we're so excited to get to be with you all we've got 6 000 seats we've sold over half of them already for the dallas smart conference this fall october the 22nd it's all day long saturday it is all of the ramsey personalities plus special guests craig and

amy groschel from lifechurch.tv that they'll be teaching marriage and he's pastor one of the largest churches in america and it's absolutely incredible communicator she is as well they're a wonderful couple good friends of sharon's and mine and we're really excited to have them teaching on marriage dr john will be teaching on mental wellness we'll be teaching on leadership on personal growth on career with ken coleman uh we'll be talking about money george camel will be there dave ramsey rachel cruz will be there it's going to be incredible christina alice will be there. Dave Ramsey, Rachel Cruz will be there. It's going to be incredible. Christina Ellis will be there.

And listen, it's all day long, and you will leave smart. That's why we call it Smart Conference. Neat name, huh? Right on the nose, just like the Dave Ramsey show. Hey, you're going to leave tired, too, because if you do anything hard, anything worth of value, you're going to leave tired. So just come ready to rock and roll. I mean, if you went to a concert that lasted all day long, you'd be to leave tired, too, because if you do anything hard, anything worth of value, you're going to leave tired. So just come ready to rock and roll. I mean, if you went to a concert that lasted all day long, you'd be tired. That's right.

You know, so, I mean, that's what and this is this is world class communication from the stage. World class thought leaders. You will not be bored. You will feel like you've gone up to a water fountain to get a drink and somebody turned on a fire hose. But you got to come. This thing is life-changing it's transformative tickets are only 39 or at least they started that vips are of course a lot more than that ramsey solutions.com slash events smart conference october 22nd in dallas the big d where john deloney will be uh one week from wednesday Wednesday on April the 27th

doing book signing there at the Barnes & Noble. Make sure you make plans to be there one week from tomorrow. Also, guys, we're getting ready to do a financial literacy theme hour about saving for college, paying for college, about scholarships, about going to college debt-free. If you have a question in that area, go to RamseySolutions.com slash ask. Put college in the subject line. David is in Montgomery, Alabama. Hi, David.

Welcome to the Ramsey Show. Good afternoon, gentlemen. How are you guys doing today? Better than we deserve. What's up? Fantastic. So I'm looking into long-term care insurance for my wife. She's 55.

Actually, we're both 55. So we probably need to wait another five years as you recommend 60. But understanding that, my question is, when do I consider her self-insured? Because I think we're kind of on the cut line for considering herself self-insured or needing long-term care. Yeah. Well, self-insured always means you can take the hit for the expense without disrupting the whole plan. Okay? So let's kind of walk that through. The average nursing home stay in America is two and a half years.

Typically, the typical scenario is 75% of the ladies outlive their husbands and so the typical scenario is papa goes into the nursing home burns through 300 grand and if that was the entire nest egg he cracks and scrambles the nest egg and um scrambled eggs and dies and leaves mama with nothing. Okay? So we obviously don't want that. So if your entire net worth is $300,000, you can't do that. You have to have good long-term care insurance. If your entire net worth is $10 million, you can write a $300,000 check and not blink.

So if the average nursing home stay is two and a half years and the average cost is around $100,000 a year, then that's $250,000 to $300,000 is your typical exposure. Could it be more? Yeah, it could be, but it probably won't be. And you can do in-home care even cheaper than that and maybe get better quality care, depending on the type of issue that you're dealing with in terms of caring for the individual. So all that to say, if you can take a $300,000 hit and the person that's left keep rolling, then you're okay.

So if you've got a million bucks and they're left with $700,000, are you okay? Yeah, probably. Okay, that makes sense. Yeah, probably. So what's your net worth? $900,000. Yeah. Well, actually, probably $1.1 million, but yeah, $900,000.

Yeah, and it'll double. Have you got it invested well, good mutual funds? Oh, yeah, absolutely. And you're 55, so when you're 62, that's going to be $2 million. Roger. Okay, and when you are 70, it's going to be $4 million. Yeah. So between 60 and 70, between 60 years and 70 years,

you're going to have between $2 and $5 million, $2 and $8 million. You're self-insured. You're fine. As long as you set the investments up where5 million, $2 and $8 million. You're self-insured. You're fine. As long as you set the investments up where you can access them, and then you do. Okay? But be ready to write the check emotionally and say, that's why I've worked my whole life is so I can take care of my sweetie.

Yep. Makes sense. Oh, no. I'll be long dead before that happens. She'll be writing the check herself. Same here, man. Long'll be long dead before that happens. She'll be ready to check herself. Same here, man. Long dead. Long dead.

He's part of the Ramsey estate plan. Our entire estate plan is predicated on me dying first. I'm a little worried. I'm a little worried Sharon has a plan here. I'm just saying. We're the same freaking age. Actually, she's actually three or four months older than me. You should probably not say that out loud ever again.

Well, it's okay. I mean, we've been married 40 years. We'll get through it. Actually, she's actually three or four months older than me. You should probably not say that out loud ever again. Well, that's okay. I mean, we've been married 40 years. We'll get through it. But, oh, my gosh. I mean, jeez. Hey, is there a – Why do I have to die first? I don't –

It's just – Because I'd be useless without her. That's right. Hey, looking at life – at the total net worth package, is there any sort of ratio that we should be careful of when it comes to how much of our home is makes up our net worth well in that case you have to sell you know with that discussion you'd have to if you said okay i have a million dollar net worth and 900 000 of it's my home right uh you can't pay for the nursing home right without selling the house so yeah that's a problem uh or you downsize it and go get a condo or something whatever and then And then you can pay for the nursing home, but you've got to sell the house.

Right. I'm not saying you have to live homeless, but you've got to sell the house. So the key is less about net worth and more can you eat $300,000. Can you write that check? Can you write that check and still be okay? There you go. And so if you had a $1.3 million net worth with a $1 million house and you wrote a $300,000 check, you ain't okay. You have no margin.

That's right. It's not okay. So you're right. That's a good clarification that you don't want it all tied up in that. Or let's say you had a whole bunch of real estate and that was your whole net worth. Plan on selling a couple of those rentals. You're going to

pop one of those rentals to be able to pay for the thing and that's just part of it. And we pray the real estate market's hot when this happens. So lack of liquidity. But being able to access mutual funds out of a retirement plan that's after 59 1⁄2, you're certainly okay if that's where they are. So not a problem at all.

Kevin is with us in Salt Lake City. Hi, Kevin. How are you? Doing well. How are you? Better than I deserve. How can I help? So I'm in need of some advice.

A neighbor of ours, just a little background. My wife and I and our three boys have been renting a basement apartment for the last five years. In that time, my income's down from below $30,000 to right now $60,000. Good. All right. So our neighbors offered to sell us their house. They're going to move. But it's way out of our price range,

but I think they want to sell it for like $500,000. It's way out of your price range. Yeah. What's that? of your price range. Yeah. What's that? You can afford a half-million-dollar house for $60,000 income, dude. Yeah, and that's my main question is, like, and maybe it's, like, a get-some-encouragement question or maybe some sort of different viewpoint question

because we're just looking at, like, all the houses in our area, and we have really good rent right now. I mean, we don't want to leave our current rent situation very quickly because we're paying like only $1,000 a month in rent. That's a good situation. So every house in our neighborhood and in the county seems to be in that kind of price range on average, like $500,000 or something up there.

No, not true. You don't think so? No. The median house price in Salt Lake City is not a half a million dollars. Nope. Yeah. About three and a quarter. About three and a quarter.

Three and a quarter? Yeah, you can go look it up. That's the median house price, yeah. Or maybe in the tiny corner of the county. Here's the thing. Here's the thing. I don't care where you live, Salt Lake City or California or Manhattan, you don't get a pass on math.

Math still works in those areas. So you've still got to buy something on a 15-year fixed where the payment is no more than a fourth of your take-home pay after you're debt-free and after you have your emergency fund in place. Dude, you're not ready to buy this house next door. I'm sorry. Keep renting. This is The Ramsey, personality. Dr. John Deloney, Ramsey Personality.

Open phones at 888-825-5225. We'll talk to you about your life and your money. Thank you for joining us. We'll talk to you about how to create amazing relationships. We'll talk to you about doing work you love. It's a free call here at the Ramsey Show. Thank you for joining us. Ellie's with us in Kansas City. Hi, Ellie. Welcome to the Ramsey Show. Thank you for joining us. Ellie's with us in Kansas City. Hi, Ellie.

Welcome to the Ramsey Show. Hi. Thanks for having me. Good. How can we help? Okay, so we have my husband and I have a stream of income that I'm not really sure how to handle. We have two foster

kids that we foster outside of the foster care system. It was a kinship foster, and their grandparents essentially pay us to do so, which isn't why we are doing it, but so we have this flow of money coming in, and I just am not really sure how to handle it. It's part of your income. Okay, so should I... when you do your budget you have

your income at the top of the page and you give every dollar of your income a a name okay it's as if you had a part-time job okay that's what i was going to ask so i should uh so it'd be like i'm self-employed so so I would want to, like, pay taxes on it, like quarterly and stuff? Yeah. Yeah, if you're going to claim it as income, they're going to claim it as an expense, then, yeah, you would need to set aside a fourth of it as taxes. And then you put the rest of it in your budget, and you work it, period. It's not different money because it's for the kids because you're going to pay for the kids stuff anyway and what you what you do to feed the kids or clothe the kids or whatever expenses you have

associated with the kids during the time you're fostering them is you're going to do regardless of the money you'll do it if it's more money than you get you'll do it if it's less money than you get you're going to do it you're going to pay the light bill because they stay in the house you're going to have pay the food bill because they stay in the house you're going to pay the water bill because they stay in the house so you don to have pay the food bill because they stay in the house you're going to pay the water bill because they stay in the house so you don't child support's the same way it's not wholly it isn't set to the side and separate it's for supporting the child and by the way you almost always spend more on kids than you receive in a situation like this ellie are y'all designated guardians of these kids

uh right now we're um we have temporary custody and we're actually in the process of adoption. Okay. All right. Good. My fear is these, these off book deals with kids can get real, real messy, real fast. Yeah. And so good, good for you. That makes me happy that y'all go through the official process there. Yes, yes and so i mean the grandparents want to still be involved and provide but that's how they feel they can because they can't physically care for that so they want to provide that way love it so it should go we have a separate account for them should it just go straight in straight into everything else yeah i wouldn't have a separate account there's no need yeah if you had your own if they were your own yeah i wouldn't have a separate account there's no need yeah if

you had your own if they were your own children you wouldn't have a separate account you would just make sure they had food and clothing and shelter right i just wasn't sure if it was like if it should be taxable or not taxable because it's not i don't know if this is a a gift to you or if this is an income to you as far as taxes it feels weird being paid to do this because we would we weren't we aren't doing it how much are they giving you um they're giving us 750 twice a month um because i think that matches what the stipend that you would get in the foster care system that the government gives, I think.

So, yeah, $1,500 a month. Okay. They are going to have a gift tax on it if they consider that a gift. Do you know if they're, yeah, are they writing this off their taxes? Are they doing this just out of the cost of the heart? No. As far as I know, they are not. Okay.

Okay. Okay. Well, an individual can give another individual fifteen thousand dollars this year okay okay sixteen thousand dollars i'm sorry in 2022 um and that's eighteen thousand fifteen hundred is eighteen thousand so um uh you know if they don't report, it's probably never going to come up. But technically, if they got audited, they could pay gift tax on $2,000 if this is a gift. If it is a gift to you, so I could just give you some money.

I could give you $10,000, okay? And there's no gift tax on that, and there's no income tax on that. If, however, I'm paying you for a service, then that's an income that you would pay income tax on that if however i'm paying you for a service then that's an income that you would pay income tax on and so i think we need to have a determination here that you know made by you and by them that this is not payment that this is a gift you probably want to get that in writing okay and then that would be we are giving you a gift and because you're being so kind to our children they're not paying you for child care services yeah if they're paying you then it becomes taxable if they're

giving it to you as a gift it's not taxable so i would probably get a letter from them stating that this is a gift and then i would not pay taxes on it but as far as how to i would not pay taxes on it because i think that's really what it is i think that's the spirit of the thing right so did do you know if that letter has to come with every every no it needs to come once it needs to come once a year yeah and hopefully it's only going to come once because you're going to get the adoption done right and if they if you adopt these kids are they still planning on giving you that gift i think so because i because I think they still want to contribute. That's not true. So if your grandparents, if I give my kids $10,000 for my grandkids, it's not taxable.

That's a gift. And if you've adopted these kids, that's the grandparents giving money to their parents, right? Okay, so before the adoption is finalized. Yeah, before it's finalized. I would want a gift letter from them. And since they're not blood relatives, I'd want a couple of gift letters from them. And you can check with a tax professional on exactly what the wording would need to be. But we're going to give you a gift of, and honestly, I would reduce it to $16,000 a year.

Let's make it easy for everybody. So they don't get caught later with the gift tax. I don't want them to get hammered. It's that simple. But I wouldn't mess with it. But it's up to y'all what you want to do. But I'm just trying to keep everything real clean. I don't want the IRS in your life later because everyone here is doing such a noble thing.

You're taking care of some kids whose parents went AWOL. The grandparents are taking care of kids that they love but are not physically able, and by helping you take care of those kids, everybody in this story is a hero. The last thing I want is the IRS getting involved in a hero. Well, I don't want some weird cousin or brother and sister or child of these great grandparents circling up and saying, hey, for the last 15 years, they've given you all this, and that was our money. I'd want some sort of writing down here. Yeah, wouldn't hurt.

I just think that's smart. And they're allowed to do... But listen... They do what they want. It's their their money there's not anything that could be done about it legally honestly uh but it's just to be a good thing it'd be a good thing for everybody to have communication just hey write me a letter that says this is a gift to the children and if i were you uh tell advise them tell them you talk to a financial person that advises that they limit it to $16,000 a year. And so, because as you said, you would do it either way. Or if you want to get really technical about it and nuanced, write three of the $750, four of the $750 checks to one of you, you or your husband,

and write the rest of them to the other one. Because they're allowed to give you $16,000, give your husband $2,000, and then you've still got the whole $18,000 there. So you get real technical. That's another way to do it. But if they're writing the check to both of you, they're going to go over at $18,000. So all that to say, anyway, that's what we're doing.

All right. Yeah, it's a wonderful story though how it just makes me think man have we have we made it too complicated just to help each other out yes it's so absurd man yes we have it's called the irs it's called congress got a messy situation death that we're not going to need them it's so strange they're scared to death that they're not going to be relevant they're the island of misfit toys but they're not and they're not relevant but but they're scared to death and so they keep passing laws and i mean the the volumes of regulations that you have to know we have two grandparents here that just want to bless their kids and they physically can't care

for these kids but they love this and these people, these foster parents are coming in and taking care of them, and everybody's good. Everybody's a hero in this story, and yet we have to figure out some stupid little side angle. Gymnastics trick, too. That's the world we live in. If I had somebody working for me like people in Congress, I'd say, you're fired. This is The Ramsey Personality, is my co-host today. Nick and Connor are with us in Lubbock, Texas. Says on my screen, you guys are debt-free.

Congratulations. Thank you. Thank you you guys are debt-free. Congratulations. Thank you. Thank you. How are y'all? Better than we deserve. How much have you paid off? Paid off $126,000. Way to go.

How long did this take? Just over five years. Cool. And your range of income during that time? We started off around $33,000, and last year we ended up with 73. Whoa, what do y'all do for a living? I am a landscape crew leader. And I am currently a stay-at-home mom, but I've had a couple of jobs in between there. I worked as a CNA, and then I worked as a research aide and a lab tech.

Very cool. What kind of debt was the $126,000? Everything. We had student loans. We had car loans. We had a loan for a bed. We had store credit cards. I had a dirt bike loan.

Y'all are freaking normal. Yeah. How old are you guys? am 34 and 29 okay and so you were 24 and 29 when you started this journey what was the wake-up call and what started you on this journey well we had um i was in school. I'm actually an LCU grad. Yeah, dude. Oh, yeah. John, you were my dean of students my first stint in school. No, I wasn't.

Was I really? Yeah, 2005. Oh, and look. That's fantastic, man. And he turned out, John. He turned out. You made it, Nick. Way to go, man.

You made it. Yep, yep. We're both actually LCU grads. Oh, that's fantastic. Very cool. But we left you a legacy of things to pay off. Yeah, no kidding. Yeah, no kidding.

So we had two vehicles that both needed significant repairs, and we couldn't afford to repair them, but we could afford the new payment. And then we actually paymented ourselves out of being able to pay rent and moved into a free rent house that my parents owned. And then shortly after that, we were sitting at a church that we used to go to, and they gave a presentation basically advertising for the FPU class that next year and showed that a group of people paid off like somewhere, it was something ridiculous, like $2 million paid off in debt in that year. Yeah, it was like in their nine weeks or whatever, the groups that they had done,

they'd paid off so much money. And we looked at each other, and we're like, okay, we really need to get into this because we're drowning. Good, cool. So we took that class and then ended up moving churches, and we became coordinators, and the rest is history.

Wow, so John's been your dean of students. I've been your dean of students. I mean, this is pretty amazing. They clearly listen to you more than they listen to me, but that's okay got them in no debt that's that's exactly right hey so what was the best marriage spat y'all had you know we were talking about that last night and really the hard part for us was just doing the actual paper budget we never really had any hard hard spats it was just making the numbers work when we had to adjust categories and

using calculators to get everything to total up properly. And we just get frustrated. And it's hard being a crew leader out there rolling up in a used car that needs some repairs and not some fancy new truck that you can go get off a lot, right? I mean, you've had people looking at you, funny, for the last few years few years well i worked for a company that actually provides a work vehicle oh well played that's great and and so we actually sold both the vehicles that we had loans on and um so they're done we we actually have a we we bought a used minivan a couple years ago paid in cash that's how you know you're in it brother when you buy a used minivan you're in a 2004 model but it was in great condition when we got it i love it way to go yeah that's good that's good you might be it very well done this is good congratulations because i

mean on 33 000 a year you start this journey that's serious yes sir and you bust through 126 you sell the cars off you keep raising your income double your keep scratching and clawing keep scratching and clawing and hustle and grind and you push your way all the way through for five freaking years. This is hero stuff right here. You guys are incredible. Thank you for being coordinators. Yes, sir.

Well, the caveat to the five years is we actually only did active debt payoff in about 22 months. Yeah. We had two kids along the way. We cash flowed the last semester of my life's college, and then we saved up for nursing school and that didn't end up coming through and so we used that money that we had saved for nursing school to put a big big bump on the student loans and then we had a small inheritance that helped us

get over the finish line wow way to go guys guys are awesome way to go, guys. Guys are awesome. Way to go. Thank you. Good journey. Representing the 806 and the Shaps. Way to go. Oh, yeah. Oh, yeah. Good job. All right. Now, you're a coordinator.

You've stuck with it. You've pushed all the way through. You're a young family, 100% debt-free. When someone comes into your class and says, what do you have to do? What's the secret to getting out of debt? What do you tell them? Communication, for sure. You you have to do? What's the secret to getting out of debt? What do you tell them? Communication, for sure. You just have to communicate everything. And budget.

I mean, obviously you can't do this without a budget. But we had a lot of conversations last night, but one of the things that we said was, you know, communicating. We figured out last night how horrible at communicating we were before we started doing FPU. And just since finishing everything, our communication is so much better. And then I've got to say, you know, just perseverance and grit because this has been a very long journey.

There have been multiple nights doing budget meetings where I was just, both of us would be tired of it, you know, usually at separate times, but then we would pull each other through and it was, it was hard. Yeah. Yeah.

Well, I'm proud of you guys. Very well done. You're heroes. We've got a copy of baby steps, millionaires for you, how ordinary people built extraordinary wealth, how you can too.

And since you're uh been uh under the tutelage of dr john deloney we're going to send you a copy of his brand new book own your past change your future as well so you're going to get one from each of us and uh predicting that his will be a best seller by this time next week when we get the lists out and we find out what happened with it but uh i'm sure it'll be a best seller of some sort we'll see proud of you guys, Nick and Connor. Way to go. Way to go, you guys.

Very well done. Nick and Connor Lubbock, Texas, $126,000 paid off in five years, making $33,000 to $73,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah! Three, two, one. We're not free! Yeah!

That scream was five years of doing yard work in the heat in West Texas and saying, I'm done with this. Yeah, in West Texas, that's real heat. That's a lot of dust. That's a lot of dirt. Hey, there's something about starting this process making thirty three thousand dollars as a combined household income that's grit man yeah i mean that's that's real that's half the national average that's thirty three thousand that's that's tough man and uh like that's saying i know we got a hundred and twenty six thousand

dollar problem here we got to start somewhere let's start here like what better time game on game on it's not like you can see it and go oh this is going to be easy no you yeah we'll be able to do this in about eight months that's a big hole in the shovel the whole ratio right there sucks yep i mean that was a little bitty shovel a great big hole that's right and they kept pushing kept pushing through and uh that's real and then during the time double over doubles his income household income how often i feel like that happens every time people get intentional and they get maniacal and then all of a sudden their workplace recognizes that they're they're showing up more and putting more in and they're more passionate and more

driven and all of a sudden man it just tells you you that we don't use all of our brain and we don't use all of our income earning potential until there's a reason. And then we go, I need some more money. And you go get some more money. And it's just an amazing thing. It's like we go work extra. We take a better job. You look up and go, these people don't pay me enough. And you get a better job. And there's all kinds of things happen, but almost every debt-free screen, the income went up during the debt-free journey. And for a multitude of different reasons, but it generally does. You're exactly right.

Love it. That puts this hour of The Ramsey Show in the books. Thanks to the folks in the booth. James, Ben, Kelly, doing a great job in there. Zach, this is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes.

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