The Ramsey Show - App - More Debt Is Never the Way out of a Tough Situation

Starting point is 00:00:00 Live from the Ramsey Network, it's the Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw. We're taking your calls at 888-825-5225. You call in, we'll help you take the right next step for your life and your money. Courtney's gonna kick us off in Oklahoma City. What's going on, Courtney? Hi.

Starting point is 00:00:40 I just have a question about home repairs and basically the route we should go on if we are trying to knock that, but we do currently live in a home that is proving to be not actually livable. Are we talking like black mold or is it like, I don't like the kitchen? No, no, we're talking about extensive mold. When we got testing done, the, uh, it didn't come back as anything majorly toxic, but obviously it's just not, um, currently ideal situation to live in. So that's interesting to me. So you got it tested and they said it's not

Starting point is 00:01:17 overly toxic. Does that just mean they can remediate it, move on and no one's concerned? it move on and no one's concerned? They can remediate it but the problem is the space that was added on to the house before we moved in was improperly ventilated. We actually didn't know this but they built on top of a crawl space and then they just sort of tapered it off and so there's a portion of the house that's not actually a true crawl space, but there was no moisture barrier. So now the support beams under that part of the house have completely rotted away with the mold and our floor caved in. So that part of the house is not habitable. Got you, got you. So how much does it cost to fix it? Fix all of them? The remediation alone would be between six and eight thousand dollars, but that does

Starting point is 00:02:07 not include demo and to rebuild it. And we actually don't know if that includes mold that has traveled up into the sheet rock or if it's strictly underneath the floor. Got you. Okay. So now hit us with the hammer of why you can't afford this and why this is a well, um, we potentially could be looking at thousands and thousands of dollars. Um, and we're, we're just wondering what can we, what route should we go? Do we take out a loan to try and get this fixed? Do we,

Starting point is 00:02:37 we've everything that we've searched, it keeps pulling up key lock, and we're just, we're uncertain about that. Um, so we just don't know what route to take here. Insurance is not going to cover it. Do you have any money anywhere? Like, do you have any money saved anywhere? Um, we have a little bit in 401k. We have a little bit in savings, but not much.

Starting point is 00:03:00 It would be just around a couple of thousand. It's not much at all. 3000 or like 12, somewhere around there. Okay thousand. It's not much at all. Like 3000 or like 1200. Somewhere around there. Okay. Yeah, somewhere around there. Okay, well you're halfway there for the remediation. That's the good news.

Starting point is 00:03:12 True. And we know it doesn't have to happen tomorrow. So could this happen over the course of the next 90 days and you guys cashflow it? Could you save up a thousand or 2000 bucks a month out of your paychecks? Absolutely not. What do you guys take home every month? I'm not sure of the exact number that we take home, but yearly between the two of us, we

Starting point is 00:03:33 probably only make about seventy five thousand. Okay, so here's where I want to challenge you because I asked you a question and George asked you a question and you didn't know the answer to what I would say are pretty basic numbers, Courtney, which is how much do you have in savings and how much do you make every month, which that lets me know you don't have much of a budget. We don't. Okay. Not much of a budget.

Starting point is 00:03:57 There is a little bit of backstory there. We have had some issues in the past and for that reason we did keep our finances separate. So I'm tallying numbers here and this is something that we are working towards. That's a separate issue. We are working towards that goal but these are roughly around the numbers that we would be working with. So you're separating the money but it's not you having all the control over the money or him having all the control over the money.

Starting point is 00:04:29 You're managing your own? Is that what I hear? Correct. Okay. That being said, it doesn't change the fact I still think that you need a budget and he needs a budget. Definitely. And I think when you do that,

Starting point is 00:04:43 cause right now you really can't answer George's question. You don't know if there's extra margin you could pull together. You said emphatically there's not a thousand dollars. I can almost guarantee I could find you a thousand bucks if I looked at your bank statements and helped you create a budget. So I want to encourage you that it is possible to do this, making $75,000 a year. So what do we do about the literal for being, you know, we cannot use that part of the house. I mean, what are you doing today?

Starting point is 00:05:11 Yeah. I'm sorry, I could only hear with both of you. I'm just wondering, you haven't been able to use it. What was it used for previously, if anything? That was our bedroom. So where are you guys living right now? We're sleeping. Well, I am currently in the living room.

Starting point is 00:05:28 Like on a couch? Is there an air mattress in there? What's the situation? We tried to move our bed into the living room and it just, it wasn't working out. So we tried to move it into a back part of the house and ultimately the couch was a better option. Are there kids involved?

Starting point is 00:05:44 Yes. Okay, how many kids? One. Okay, and their bedrooms intact? Yes. But mom and dad are hanging out in the living room? Yes. That's an adventure. That's a story you'll be able to tell one day to your kids.

Starting point is 00:05:56 It's a camping trip. It's a camping adventure, for sure. Could you survive this for another six months? We've been living like this for five years. Well, I'm sorry, five years? Yes. Wait a second. So this issue has been happening for five years

Starting point is 00:06:12 and we're just now doing something about it? No, this has been, like I said, there's been some other issues in other areas that don't deserve any time on the air. But now that we have worked through some of those issues and we are trying to get on top of finances, um, we, we just truly don't know where to go. And we've only recently started, Arrest and recently started, uh, the day Ramsey plan.

Starting point is 00:06:40 And so we're on the right track, but it's been really hard to try and convince him that taking out some sort of some sort of loan or something somewhere to get this fixed is a good idea because right now he's really wrapped up in the idea of knocking out all that knocking out everything but ultimately so you want to take out the loan and he doesn't yes well here's the thing here's what i'm hearing there's discomfort going on you've you've but ultimately, I hope he's never hit. So you wanna take out the loan and he doesn't? Yes. Well, here's the thing, here's what I'm hearing. There's discomfort going on.

Starting point is 00:07:08 You've experienced something in your relationship, you don't have to mention it on air, but whatever that is, that has been very uncomfortable. And now you've had this thing pop up in your home, the mold and the issue with the, I don't know, joist, is that what they're called? I don't know, the wooden beam. And that's uncomfortable, and you're trying to get the money and that's separate. So that's

Starting point is 00:07:28 uncomfortable. There's a lot of uncomfortability going on. And now you called this show and we're asking you to do something else that is potentially quite uncomfortable for a longer period of time. And I think you're probably just experiencing a fatigue in that area of, can I just please have a simple solve guys? Can you just make it easy for me? And unfortunately, debt can look like the simpler, you know, it can look like the solution, it can look like the easy button, but you've just told us you've been through some things.

Starting point is 00:07:56 And if you turn around and add this debt to the equation, yes, maybe you get the thing fixed tomorrow, but now you've got this huge amount of debt hanging around your neck that you guys have to get on the same page on financially, what you get the thing fixed tomorrow, but now you've got this huge amount of debt hanging around your neck that you guys have to get on the same page on financially, which you're not in order to pay off. And I can tell you, it's probably gonna be easier for you guys to lock arms and pay for something in cash

Starting point is 00:08:16 than it is gonna be for you guys to lock arms and pay off this debt because your money's separate. So he pony up the cash, you pony up the cash, and you guys get this thing paid for in cash. I'm on team husband. HELOCs are only going to give you permission to do the stupidest things, like take this mold situation and go, you know what? Full kitchen reno. They're giving us a hundred thousand dollars. Don't do this Courtney. It's going to be hard, but more debt is only going to make your situation more difficult. This is the Ramsey Show.

Starting point is 00:08:54 Samantha's up next in Indianapolis. What's going on Samantha? Welcome to the show. Hi, thank you for having me. Sure, what's going on? So late last year I just had a series of unfortunate events. I had lost my grandma who was very close to the position, she raised me and then a month after that I got laid off from my job. They eliminated my role and while I had that job I was making about $22 an hour so you know I was very well off during my time there. Um, and I was living off credit cards because I thought that I could afford it at the time because I was making so much. Um, so basically I had about close to $8,000 in credit card debt and, um, just between grieving the loss of my job and then the loss of my grandma

Starting point is 00:09:40 was very close to, um, I just wasn't keeping up with it. I just kind of shut down mentally. I let it last, I wasn't communicating with them, trying to communicate or anything. So fast forward to now, we're at the point where everything's about to go to collections. My mom actually got a life insurance policy from my grandma. I was not on the policy, but she was,

Starting point is 00:10:01 and she gifted me some money out of her part of the policy. And I'm using it to pretty much pay off as much of the credit card as I can. How much was the life insurance policy or the portion you got? My mom only gave me about $8,000. How much is now the inflated collections credit card debt? I have actually been working, making phone calls all this week to get all of them paid off. So they're all good.

Starting point is 00:10:30 I have $1,800 left out of the money and I have one credit card left that's about to go to collections. That's $2,300. It's still with the company, it's not in collections yet. And I'm trying to get them to negotiate and just settle for the 1,800 so I can just be done with it and be debt free. And I'm unemployed now also, I'm just trying to get rid of all of this debt before I go

Starting point is 00:10:52 back into the workforce because I don't want to have that stress right away. So I'm essentially going to go back to work with having to like. Well how are you going to live? What are you living on? What portion of money are you living on? So portion of money are you living on? So I have I'm living with my partner. He's been nice enough to kind of take on my part of the bill So he's fully supporting me right now Okay, I don't love that Is this all the debt you have left to your name is the 1800 or the 2300?

Starting point is 00:11:20 Yes, okay There's part of this. Okay You got the life insurance money if you had called us a couple of days before you paid off this's part of this, okay, you got the life insurance money. If you had called us a couple of days before you paid off this debt, part of me would have said, hey, you're between jobs, you're in a bit of a storm mode.

Starting point is 00:11:32 Let's hold this and let's get really, really proactive about finding any job, just so you have some money coming in. And then you could turn around and pay these bills. But it bothers me that you have no income whatsoever coming in, and you're kind of at somebody else's kind of you're at their mercy.

Starting point is 00:11:50 And I love that you're paying off debt, but I also you got to get some money coming in and I don't want you thinking, okay, I paid off my debt. I can sit over here and like this guy is going to help me out. Like what's your plan for getting real money in the door? So I actually do have a job lined up. I'm starting a part time retail job. It's just because it is part time. That's all I could just find at the moment. It's just not enough to like, check one with it with that if that makes sense. So I

Starting point is 00:12:19 was just trying to pay it off like by the end by the time I start working, I could just focus on paying my actual bills and things and not putting it all towards it. When you say lined up, have you accepted the offer and you're starting, you have a start date? Yes, I start next week. Okay, and you're getting another job to go with that part-time job.

Starting point is 00:12:40 Have you started that process? No, I'm sorry, I just have the part-time job, I haven't started that one yet. Okay, so that's what I want, that's what I want for you. And then once you do that, yeah, pay off this last debt, but you've gotta have a living wage, otherwise you're just gonna start another fire. Does that make sense?

Starting point is 00:12:58 You gotta have that in line. So yeah, go back to, you're saying they won't settle for the 1800 when it's time? Correct, so they're not saying, they're saying that the account is not negotiable at all and I have to pay that full 2300. When is it going to collections? How soon?

Starting point is 00:13:15 They wouldn't give me an exact date even, but I got an email saying that it will, it's going to go in 60 days or less. Okay, so you can come up with 500 bucks in the next 60 days. Right? Even with a part-time retail job, you'll make over $500 net in 60 days.

Starting point is 00:13:37 That's two months. Yeah, I could probably do that, you're right. No, not probably. Samantha, I need you to have a little confidence here and go, I'm paying this debt off next month. I mean, you can sign up for Instacart tonight and go make 500 bucks in a week. I get that you don't want to pay the money. Like I can sympathize with not wanting to, but you did rack up this money.

Starting point is 00:14:02 It's not in collections yet. Let's, let's pay what we owe and make it get it right side up. But I think there's something deeper here because you haven't worked in a long time. How long has it been? It's been since before Christmas. And how old are you? I'm 27. 27. So my guess is, what is it? I'm getting into Ken Coleman land, but if you could snap your fingers today and be in a career field, what would it be? So I was doing data entry. It was a work from home job.

Starting point is 00:14:39 And I'm just trying to get back into that field because that was really what I love doing. And what's kept you from getting back into that field? Is it qualifications? Is it finding the openings? Basically just finding the openings. The company that I worked for, they pretty much eliminated my role and sent it overseas.

Starting point is 00:15:01 And that's what pretty much all of the companies that are relevant to my field are doing. And I even went, you know, branched out a little bit to just do work from home in general because I'm unable to drive. So I have to have work from home. You're unable to drive. Is that due to medical issues? Yeah, I have epilepsy and I get seizures. So I'm not able to get a driver's license. Okay, good to know. Okay, so you've got some limitation there.

Starting point is 00:15:25 I just wanna make sure you're getting on a path that you're excited about, because talking to you, it doesn't, I don't sense the excitement, I don't have that sense of urgency behind what it is that your next steps are gonna be career-wise. Before you get off the line,

Starting point is 00:15:38 we're gonna give you a couple of resources. I want you to have find the work you're wired to do. There's a career assessment in there, and I think it'll give you some ideas on not the work you're wired to do. There's a career assessment in there. And I think it'll give you some ideas on what, not only how you're wired, but what that translates to as far as different careers are concerned. If we give it to you, do you promise you'll do it? Yeah, absolutely.

Starting point is 00:15:55 Okay, great, great. We'll give you that. We'll give you paycheck to purpose. We'll give you proximity principle. I think that you just need to get fired up in the area of career. I don't want you leeching off some dude Fair enough

Starting point is 00:16:10 Yes, yeah, you're more than that. You got you've got skills. You've got talents You've got a lot to offer and I want you to tap into that And I want you to believe that how old are you Samantha? 27 okay, I Think we're just rooting for Samantha more than Samantha's rooting for herself And I want you to believe that. How old are you, Samantha? I'm 27. Okay. I think we're just rooting for Samantha more than Samantha's rooting for herself. And I think you need to get some mojo back. You've been through a lot.

Starting point is 00:16:33 You've had a lot of grief, the job loss, grandma who raised you. But the best path out of grief is not to stay put and just sit and wallow in it at home. You've done that. You've done that long enough, it hasn't gotten you anywhere. So the way I found my way out is through action, activity,

Starting point is 00:16:50 getting some momentum behind it and going, all right, you know what, there is a path forward, I'm not stuck here. And I think that's what it's gonna take for you. And I think there's a life beyond just another part-time job, another data entry role, and that's what these resources from Ken will give you is a deeper purpose that really lights a fire under you

Starting point is 00:17:07 to go do something that you're passionate about and make good money doing it. And then you'll never touch a credit card again. Have you canceled all of your cards? Yeah, so all the ones that I have paid off, I just done settlements. And the agreement is like once they get that settlement, that they're gonna be closed.

Starting point is 00:17:22 Good, good. Good, and then never open one again. These companies are not your friend. I'm tired of them. It's not a security blanket. This is going to only hurt your future if you rely on credit card companies for anything. Even if you quote, pay it off perfectly.

Starting point is 00:17:36 You can do that with your own money and not have to be at their, I don't know. Their... Under their thumb. Under their thumb, there you go. That's what I'm looking for, a big old credit card thumb, no thank you. Listen, Samantha's gonna make good choices,

Starting point is 00:17:48 I believe in her, the fact that she took the inheritance or took the life insurance and made a good, what she felt was a good choice in the moment. Cleaned up the mess. Yeah, that's a good sign. All signs are on the up and up for Samantha, she's just gotta grab life. Gotta grab it by the...

Starting point is 00:18:03 Horns? Yes. We're really great today. We're finishing each other's... Sentences. Golly. All right, we'll get there, Jade. We'll get there.

Starting point is 00:18:10 This is the Ramsey Show. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah.

Starting point is 00:18:17 If you're tired of living paycheck to paycheck and wondering where your money's going, your first step is getting on a budget. And our team is hosting free budgeting trainings this month where you're gonna learn step by step how to make and stick to a budget using EveryDollar. Plus you can get your biggest budgeting questions answered in a live Q and A.

Starting point is 00:18:34 So jump on it, spots are limited. You can sign up for free at EveryDollar.com slash webinar. James is up next in Buffalo, New York. James, welcome to the Ramsey Show. You with us, James? James is up next in Buffalo, New York. James, welcome to the Ramsey Show. You with us, James? Yes. Okay, good. What's up?

Starting point is 00:18:53 So I am looking for some advice here. I've got a startup business in e-commerce, but don't really have any marketing money. So in turn, I'm not converting anything. I'm not able to work a regular job because of my current living situation. Which is what? The single father of three,

Starting point is 00:19:18 and I don't really have any family to help. And so that's really why I'm trying to start something online and make some good money from that uh... i'm looking for like about five thousand for marketing don't know what it's and go

Starting point is 00:19:33 are you breaking up on a stand speak directly in your phone it's a couple of cousins that i would be able to get it from uh... but i don't know if that's a good idea you know i i hear that maybe getting personal loan from family members really isn't the best way to go. So I just wanted you to input on that. Yeah. You're right in that.

Starting point is 00:19:52 It is one of the worst ways to go. Unless you hate your cousins, then it's probably a net, you know, it's a net neutral at that point. Cause they know they're not getting this money back from old James. He's not going to turn five grand to 20 grand overnight with the startup business. Right. Yeah. I mean, you have to think about it from both ends. I mean, obviously that loaning

Starting point is 00:20:12 money from families is not a great idea anyway, but now you're doing it into the unknown, into a business you've never run before. And what if you lose the money? What if you don't get the return on investment that you think you're going to get on the 5k? What happens then? Yeah, exactly and I mean again my situation Can I tell you James as a ex marketing guy? Good marketing will just make a bad product fail faster. And so the question is what are you actually selling and why don't people want it? Well, I think it's,

Starting point is 00:20:51 Cameron says, Sorry, you're breaking up. Sorry, James, we can't hear you. What are you selling? What's the business? I also have a mattress company that I'm working more on. It's called Zee's Mattress. Ooh. What's special about your mattress that I can't get from the 400,000 mattress sites

Starting point is 00:21:08 that are out there with amazing marketing and slick sales and crazy deals? It's just, right. Well, it's just a luxury mattress at not a luxury price. It's an affordable luxury latex mattress. It just sounds like, let me say this, I'm not trying to kill your dream, but I am gonna say this. I feel like what you said makes sense. You are a single dad, you've got to come up with creative ways to make money.

Starting point is 00:21:37 I love the way you're thinking in that way. You don't have any cash though. You're looking for 5K and to start a mattress company, I think you're gonna need to save up a lot more money to do this and do this right. Can we start smaller? Can we start with a smaller product that's easy for you to create or manufacture or sell?

Starting point is 00:21:56 Maybe it's a service-based thing and you do that online first and get some chops before we start into something so major, unless that's your background, unless that's his background and we don't know about it. Well, here's my guess, and I've seen these videos on TikTok. I'm guessing this is where James got it from.

Starting point is 00:22:12 You can get into wholesale mattress business where you get the mattresses directly from the companies making them, the manufacturer, and then you increase the price and sell it and white label it with whatever name you want. I've seen the guys with the, they've got the little storage units with the mattresses in there and they're like,

Starting point is 00:22:29 you can make $10,000 a day. Have you been past a mattress firm in the past five years? They're still the same guy spinning the sign on the corner. I assume it's a front for drugs at this point. I don't, it's a breaking bad situation at any mattress store in the country right now. It's a breaking bad situation at any mattress store in the country right now. It's not a hot commodity.

Starting point is 00:22:47 And so that's my guess. And I just saw this post from Alex Hermosy that I thought was brilliant. He said, why do you think you're gonna make money in your sleep if you can't make it while you're awake? And I was like, whoa! He just dropped one right there. That is a mic drop situation from Hermosy.

Starting point is 00:23:02 And he's right. The people who are attracted to these passive income streams, they're not making active income. You gotta start with that, then we can figure out a way how to make money in our sleep. But right now, James, what I would encourage you to do is just find a work from home job.

Starting point is 00:23:16 If it's difficult for you to go to an office, there's plenty of jobs out there. You sound like a smart guy. I would be looking for a job that I can do remotely with consistent pay that doesn't involve going into debt because I'm telling you right now, I don't want you calling back saying, I owe three cousins 20 grand, my mattress business failed.

Starting point is 00:23:33 What do I do? And I'm not trying to dog your idea. No. I just know that's in the cards. So Mr. Wonderful says, take it out back and shoot it. Is that what he says? That's what he says. and that's what I say. That's what I'm gonna have to say to this.

Starting point is 00:23:47 I've had a lot of ideas that I thought were really cool too. Oh yeah. And I'm glad I didn't pursue them. You know what I mean? Can I tell you one of the worst hair brain schemes that I was ever a part of? So multi-level marketing is what it was,

Starting point is 00:24:01 but it was back in like, let's see, I was married in 07, so this would have been in 08. My friend came to me, she's like, you gotta come to this presentation with me. Oh no. They're selling phones that you can call people over the internet. So, and I was like-

Starting point is 00:24:17 Instead of like a cell tower. And you had to like invest money to buy the phones. And so think about that now. It's so silly, like it's so silly to be able to call someone over the internet. And I was like, all right. Voice over IP, Jade, it's the future. It was voice, exactly, voice over IP.

Starting point is 00:24:36 And I went home and I was like, Sam, we have to invest in this, it's voice over IP. He looked at me, he was like, we're not doing that. Thank God. If you ever use the words investment or opportunity, that is a great clue that you should be running far away. If you used it or someone else used it on you, that's a clue, you're about to get screwed.

Starting point is 00:24:54 But it's the desperate. My point is, we knew that we were in debt at that point. We were so desperate and I could just sense with this guy, he's looking for something to grasp onto. Single data three, needs income fast, goes, well, I could set up a website and sell some mattresses. Yeah, you see the posts, you see the TikTok.

Starting point is 00:25:09 Your friend calls you and says, this is the newest thing. It's called the internet. And you can make calls over it. Watch there be egg on my face when James calls back and he's like, hey, I'm a billionaire with my mattress company. I started online. Listen, I hope it happens.

Starting point is 00:25:22 I'm never, no ill will. I hope he does it. I'm wishing him the best. All right, let's take a quick one here from Josh in Louisville, Kentucky. What's going on, Josh? Oh, not a whole lot. How are you all doing? Great. What's your question? I've got a lump sum of money coming in and I was wondering if it would be alright to jump in the snowball to pay one debt out. Ah, okay. So our debt snowball method would say smallest to largest balance. You're saying, hey, I have a big lump sum coming in. Can I hit the largest debt first?

Starting point is 00:25:48 So what's the lump sum you're getting? It's about 80,000. And what's your largest debt? 192. What kind of debt is it? That's my house, but that's not the one I'm wanting to pay off. Okay. I'm wanting to pay the one off below it, which is because they're kind of a headache to deal

Starting point is 00:26:08 with. What is it? Student loans. Student loans. Is it one giant loan or a bunch of little ones? It's several little ones, but it'll pay them all off that amount. So if you put them in order from smallest to largest, including those loans how does it what comes before it at that point? I've got a car loan before that and a solar panel after that and it would be the student loan at the

Starting point is 00:26:36 word. What's your total debt outside of the mortgage? Uh, about 170. 170 and you'll knock out about half with this lump sum. Where'd the lump sum come from? We had a small accident and insurance paid us out that time.

Starting point is 00:27:00 Okay. So what's the smallest student loan? If you broke it into the smallest chunks, what's the smallest one? I really don't know. Okay. I have a feeling that I mean you compared it to solar panels so I have a feeling there might be some student loans in there that end up being the smallest ones but you're gonna have to go online and look and see. Right, correct. So that's probably the case. I would list out, go ahead and list out all your debts tonight, smallest to largest balance, see how it all lays out.

Starting point is 00:27:30 And then if you'd apply that 80k, you'll see exactly how many payments you'll free up, which you can then apply to the next biggest debts. And the thing I want to encourage you, Josh, is this plan is all about behavior and getting this lump sum from the accident isn't going to change the behavior that got you here. So I would encourage you to follow the plan as is stated and I think you will see great success. Thanks for the call. We know that you guys have been trying to help people in your life get started on the

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Starting point is 00:28:44 that could help change someone's life. Michelle is in Dallas up next. What's going on Michelle? Hi thanks for taking my call. Sure. I'm in a tricky spot financially. There's something I've been managing for about ten years that started as a family business over 40 years ago. But over time it's turned more into a hobby and the emotional connection is really strong. The financial side has really gotten foggy and I honestly don't even know how much I make from it right now from month to month. And I'm trying to decide if I should keep pushing forward or close it.

Starting point is 00:29:27 I wanna know what the smartest move is based on my math. I'm trying to budget my attention, and I'm also applying for steady jobs like the post office to build a stronger foundation. I guess my question is, how do I start untangling the emotional from the financial? And how do I know if this is something I should keep trying to grow on my own piece? I'm sorry.

Starting point is 00:29:53 I'm so sorry. I'm so sorry, Michelle. I'm so sorry. I'm so sorry, Michelle. And clearly this is, it's been a long time of struggle. There's a lot behind those tears that you've tried. I can tell you've tried your darndest to keep this business and dream alive and probably for the sake of your family.

Starting point is 00:30:11 Yeah, well, yes, because it's, you know, my mom and dad started it and I took over 10 years ago and I have done it all on my dollar. I have gotten no loans. I'm not in debt with the business. Good. What's the nature of the business? What do you guys do? It's an upholstery shop.

Starting point is 00:30:34 Okay. And I'm the only one that's working now. I have no employees. And so it's really started to turn into a hobby and I'm burnt out when I come to work I pull up to the shop and I'm just sitting in my car going I have to go in and it's not and it's it's busy I'm eight months booked out. So that makes it even harder If I close how do I close? You know, so you're eight months booked out

Starting point is 00:31:03 Help me understand that part your eight months booked out. Help me understand that part. You're eight months booked out, but it's not making any money. What does that mean? Are the prices too low? The costs are too high? Have you figured out what that is? I think a lot of it is I think I can get something done. You know, it's just me.

Starting point is 00:31:22 So I think I can get this done. You're the one that reuphholsters the furniture. You do it. Yes. So I just wonder, Michelle, or I wonder if you're the person who does the work and you need someone else to run the business side of it. That's the problem is that financially, I don't see how I can do that when I'm struggling to just barely keep the lights on and keep my house. It's me at my house all by myself. Right, but you have, you're booked out eight months. And I just, I'm not trying to change your mind.

Starting point is 00:31:55 I just wonder if a lot of that's- It's not for a lack of clients that we would be closing this. It's because you're just emotionally overwhelmed. Do you wanna keep doing this? Do you enjoy upholstering? I do, but I'm so burnt out and I've kind of closed my books and just working.

Starting point is 00:32:15 I don't see a future as far as I can't work fast enough to make enough money. And I'm 56 years old. I have zero retirement. and I try to do, I've been to financial peace university twice and I've tried to do the every dollar budget. Every month I try to do it, but I never know how much I'm actually making.

Starting point is 00:32:38 Do you have a CPA that you work with or an accountant? I do, but she's never, she does it on the side. And so basically I do the QuickBooks and then she cleans it up and does what she does, her magic. So there's no real advice happening here. She's just like hitting a button and going, okay, done. I think at this point it's probably spilled milk. It probably is time for you to close doors

Starting point is 00:33:06 and go do something else. But I mean, I would definitely be remiss if I didn't say, it sounds like there probably is a business here. It sounds like you need another person who knows how to do upholstery to help you. And it needs, it sounds like you need another person who runs the day-to-day business side of things. And you might find, I don't know,

Starting point is 00:33:24 but based on what you said, you might find, I don't know, but based on what you said, you might find that you do have the money to pay another part-time upholsterer and you do have the time to pay another one person, you know, a small salary to help you run the business. If you're done, you're done. And there's nothing wrong with being done at the same time. Well, and I kind of, in my heart, I do love what I do. I love it when I'm done with the piece. I'm like, Oh, look, I did this. And I've called another upholstery shop that's, you know, in another town like five hours away. And I know that they had bought their shop in pretty recent and was asking

Starting point is 00:34:01 questions. And you know, it's hard to find somebody to do upholstery and shops around me are closing regular I mean shops are closing all the time because people aren't getting things reupholstered they're going on Amazon and buying a new one just go to Wayfair and get it cheap yeah but there's a market for it I mean you start getting networked with interior designers and people working on new builds and they want custom pieces or they love the vintage stuff. There's clearly a market for it. Otherwise you wouldn't have eight months of business backed up.

Starting point is 00:34:31 And so I don't want you to give up because of that, but I also want to free you that if you do close this business, you're not a failure. You're not a bad person. You're not a bad daughter. I feel like that's what I need because it's I mean the whole family is touched by it because of the fact that it's been in the family so long. Well if they cared about it so much why are they not involved? Well my mom can't anymore and my poor little dad he's he has been up here and I sent him home all the time. I'm like, you've got to go home. You need to enjoy your retirement. You can't just be up here, you know, trying to make me survive.

Starting point is 00:35:16 Michelle, I think you're a really, I think you're really sweet. I think you have like a servant's heart. I truly do. My guess though, I bet no one is saying those things to you. I think you're just internalizing that. Your mom and dad didn't say that you're a failure if you close this business, did they? No, no. As a matter of fact, you know, I talked to my dad and he was like, it'd be good if you got the job at the post office and you had a retirement. Yes, yes, yes. So this-

Starting point is 00:35:52 There's nothing wrong with trying something different, trying something new. And guess what? You can always continue upholstering on the side. And I think you should, in a way that's really healthy for you. I think that's what I needed to hear. And just take on the projects you want to take on

Starting point is 00:36:05 and charge what you're worth, Michelle. Clearly you're not. Clearly you don't think you're worth much. If this business isn't making money while you have eight months of work backed up and it's a solo preneurship. And so I would encourage you to charge more, explain to the client what's going on.

Starting point is 00:36:19 Hey, it's either I close business or I raise my prices. We've kept our prices this way for a decade now and inflation's hit us hard too. Raise your prices. And you know, this is all me, all my time. And I think people need to respect that. And again, if you chose not to ever upholster anything again, no one's gonna shame you for that.

Starting point is 00:36:38 I appreciate that. I'm gonna send you a copy of Dave Ramsey's newest book. It's called, Build a Business You Love, and it walks you through. You do, have you read it? I have it. I am in the middle of it actually. Good, okay, here's the good news.

Starting point is 00:36:54 You're in the treadmill phase. You are just trying to keep up, and if you wanna keep this going, and you wanna grow it, and you wanna get the overwhelm off of you, you're gonna have to learn how to delegate. You're gonna have to learn to hire the right people to get involved in the business to help you.

Starting point is 00:37:08 And there's people who love sales. That's what they're good at. There's people who love accounting. It's what they're good at. And there's Michelle. And she's the only one who can upholster like Michelle does. Also read the book, Necessary Endings by Henry Cloud. That's a great one.

Starting point is 00:37:21 That's a solid one. Oh, Michelle, we're rooting for you. I feel for you. There's a lot one. That's a solid one. Oh, Michelle, we're rooting for you. I feel for you. There's a lot underneath this business, and I hope it stays afloat because there's not a lot of people in the trades, and it sounds like you love what you do, and I hope you continue doing it. From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and

Starting point is 00:37:45 create amazing relationships. I'm Ramsey Personality George Campbell, and joined by my co-host, Jade Warshaw. We're taking your calls at 888-825-5225. Robert is in Kansas City up next. What's going on, Robert? Hey, thanks for taking my call. My parents are in their 80s and they've been dealing with some health problems the last few years. So they made me the executive of their state

Starting point is 00:38:10 a few years ago and they put me on their bank accounts and just kind of, you know, we're asking for help and we helped them sell their house and moving them closer and help them find a new place to live. I got a niece who keeps asking to borrow money and my mom continues to loan to her with no repayments and yet every month my mom is like oh I think next month she's gonna start repaying and so my question is what is my responsibility to my parents as someone that they've asked to kind of help and oversee? Where does my role do I say something to my niece? What would you guys recommend? How old is the niece? She's 40.

Starting point is 00:38:48 And how much money is she asking for? What does this look like? So it was like 5,000 and then another 2,000 and then 2,500. Wow. We're into about $10,000. And you know, my niece called me last earlier this month and was kind of, you know, talking about life and how things aren't great. And she made an offhand comment about how, oh, there's a lot of cousin drama. And I'm just picturing, you know, her cousins, her sisters, her siblings, her cousins, like probably resenting what is going on. Because my mom tends to talk a lot. And so I think everybody probably knows that she's borrowing money. And I think my sense is there's price and resentment building up there.

Starting point is 00:39:26 Has anyone else asked for money from your mom? Yeah, through the years. Yes, other pretty much all the nieces and nephews have at different times that they've all paid it back. There was a step brother many, many years ago who asked for money who didn't pay it back and that did not go well. That kind of still comes up in conversation, you know, 30 years later. So your mom has been soured by these situations before. Is she a people pleaser? Why does she continue to do this knowing that she's likely never going to see this money?

Starting point is 00:39:58 Yeah, I think she is a people pleaser. I think she genuinely cares about her grandkids. But you know, I think she struggles with saying no. And I think especially she started this a long time ago and I think she's struggling to cut it off today. She made the comment about three or four years ago, I'm not loanin' money to anyone anymore and yet she's continued to do it.

Starting point is 00:40:19 So. Well, she puts you on the hook to help her. Yeah, what is the, I guess, the boundaries of your help? Because you're the executive of the estate, and you said you have access to their bank accounts, but they haven't put you in charge of all of their finances, it sounds like. Yeah, no, I am not their representative.

Starting point is 00:40:37 I don't write their checks for them. I don't do any of those things. So that's, I know, I'm asking the question. I'm not sure where. They're legally grown adults who can make as many terrible decisions as they want. Correct. Now, if and when they pass, that's when you'll be in charge

Starting point is 00:40:50 to make sure their wishes are executed. But other than that, I don't know that you can stop her if that's what she wants to do. Yeah, all you can do is- Other than try to talk to her and convince her that this is not gonna benefit her and it's actually gonna harm the entire family. So you would not recommend me saying something to my niece about, hey, you know, grandma's

Starting point is 00:41:11 mentioned that Simon's started paying this loan. I wouldn't say it from grandma's perspective. I'd say it from your perspective. I wouldn't say, hey, grandma's doing it because you don't want to speak for grandma, but you can go to your niece and say, I'd go to the niece and to grandma. I'd go to grandma and say, listen, this is not good for you. I know I'm not in charge, but I'm observing this. And I, you know, you've asked for my help and I don't want to overstep, but I think this is a behavior that you need

Starting point is 00:41:36 to stop. And you really don't have the money to give and she's not going to pay it back. You can have that conversation. Then you can go over to the niece and say, hey, you know, I've been helping grandma and grandpa out with their money and I'm seeing this trend and they don't have this money to give you. They're being nice, but they're making a mistake and you've got to stop asking. I'm asking you nicely, you're grown,

Starting point is 00:41:58 you can do what you want to do, but I'm just letting you know what I see going on and leave it at that and see what happens. Great. Do they have a lot of money? What is their net worth? They're not worth, they're in a paid off house and they've got like $250,000, you know, that's their retirement. Yeah, they don't have the money.

Starting point is 00:42:17 Yeah, that's not like outrageous generosity money where we can just fund misbehavior from 40 year olds. Right. So if your mom wants to be nice and be generous, she can gift money on occasion, but clearly this has become entitlement. And it's only gonna spread across the family as your niece says, well, yeah, they gave me five grand.

Starting point is 00:42:35 You should go ask a grandma, bank of grandmas, loan it out money, interest free. And so I think this is gonna, your mom has to come to the realization that this is harming her and her financial future and the family. And I want her to be the person to stop this, not you as the evil middleman cutting off the flow of money.

Starting point is 00:42:54 Cause that's just gonna cause more family drama. Right, that makes sense. So that's what I would encourage you to do. It's a tough situation. It's very touchy. You're gonna have to be very tactful with all of this and convincing an 80 something year old to do anything is difficult. So I wish you the best of luck. Thank you so much. I appreciate it. Yeah, absolutely. Gotta love a little family drama. Yeah, that happens. $5,000 is not a little bit of money. Sheesh.

Starting point is 00:43:21 No. And yeah, she's clearly if you're borrowing and then saying, yeah, I'll pay you back, and then asking for more money. Before you've paid the last, Not a good sign. Okay. All right, let's get to Victoria and Charlotte, North Carolina. What's going on, Victoria?

Starting point is 00:43:34 Hi, George and Jade. Thanks all so much for taking my call. Sure. What's happening? So long story short, my question is, should my husband and I sell our home to pay off our debt? Wow.

Starting point is 00:43:49 Give us the lowdown. Why do you feel like you need to do something that drastic? Well, we both believe that we have outgrown our home. We just had our third and last baby a year ago. So we have three children. Um, so we knew a larger home in the future was, you know, what we had planned, but so right now we have $201,000 left on our loan. The value of our home is 30, 10, and we have $87,000 in debt. Um, we're on baby step two, so we have the thousand dollars saved.

Starting point is 00:44:24 And then if I'm being totally honest this is just bad debt you know before Dave before we found the Ramsey plan and everything so. So your plan would be to rent? Yes we would like to rent and for me it's more just not having that debt anymore. Our income, I believe, is fine. What is it? So my husband makes 65 at his full-time job and then he is a Navy reservist.

Starting point is 00:44:57 He does make an income from that, but that income just pays our medical and our dental insurance. That's great. And what about you? I just do little odds and ends. I am a travel agent. I work, I stay at home with the kids. That's my priority but I do do travel agent work you know on the side. What's

Starting point is 00:45:16 that translate to every month? It's about $12.50 on average. Okay. So can you guys actually rent a home that's around 25% of your take-home pay that can fit you all? We can't, we have been looking. We're not ready to fully commit to it. We just really needed an unbiased opinion on, is this a good idea? I don't know that I would.

Starting point is 00:45:41 I think that you're wanting to get out of this debt fast. I didn't really hear anything super compelling that would make me sell my house. Other than the fact that you don't like the house No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, out of debt. I love that. It's an awesome thing, but I'm scared you'll be right back to where you were and also unable to find a home you can rent at that price. I think I'd vote no. I'd vote no. I would pause on this and see if we can get our income up, get our expenses down, and

Starting point is 00:46:11 knock this out fast before I went and sold the home. Mindy's up next in Salt Lake City. What's going on, Mindy? How can we help? Hi. So I'll just get to my question. I'm planning on making a big change in our family, where I'm going to go back to school. Cool. That's cool. But with this change, it requires a lot of... We live in a very high-priced area and everything, and with this particular program, I need to have... Sorry, it's very expensive and the program itself doesn't let me work. And so, we are thinking of changing from a townhome into a living trailer to try to cut expenses

Starting point is 00:47:01 so that we don't need to take as much under us loan wines. So I can finish this program. So you're still going to go into debt for it, just not as much? That's the idea, yes. What's the program? What is it for? It's a profusionist program. It's the people who run the heart and lung machines.

Starting point is 00:47:21 Heart and lung machines? In cardiac cases. Yeah, in cardiac cases. Okay. What does the program cost in total? The one that I really want to go to is about $72,000 in Salt Lake. Wow. What do you make doing this at the end of the rainbow? So it does depend on where you live. I've seen it in my area here, it's about $172,000 just as a baseline and it goes up from there. And how long does the program take?

Starting point is 00:47:54 It's two years. It's a mattress program. Okay. And what will your income be if yours goes away? So my income right now is 104K and my husband's is 43K. So it'll be 43K. Oof. That's tight.

Starting point is 00:48:15 That's, oh my gosh. Yeah, I don't know that this is feasible. And that's why loans are necessary. Could we pause and save up in cash flow? I mean, making, if you guys are making 147 K, how quickly could you stack up cash? And that's the problem is that even the, I was traveling, doing travel nursing just locally

Starting point is 00:48:40 and I was making significantly more. But the problem is, is that this area is so expensive Even even if we just decided to downsize where we live just to a different apartment. That was a little bit cheaper It's only like maybe three hundred four hundred dollars cheaper a month So when you see yourself, okay when you do, see yourself doing this heart and lung machine operation, are you doing it in Salt Lake City or are you taking the first job that you can find out of this program? I mean, that depends because there are, we've also talked about California where we're, we're now talking about 200, 20, uh, 230 K.

Starting point is 00:49:23 I'm asking, I'm asking because what I'm trying to find out if it's just so expensive in Salt Lake City, what's keeping you there? Is it family or is this something that you could potentially say, hey, our goal is to get out of an expensive area and kind of like force rank these goals. Our goals to get out of an expensive area

Starting point is 00:49:40 are goals that I have to make this career shift. Where is it that we ultimately want to live? And I feel like that could help inform some of the answers and also the order in which you do this. Does that make sense? Yes, and I would say that our goal, our family is in this area, but we've lived here for the past five, seven years and it has just increasingly gotten more and more expensive

Starting point is 00:50:05 to the point where my job is, we can't say about money like this. And it's ridiculous. So we do- What do you pay now for your home? What do you pay now for your living? We don't even, we tried to buy a home and we couldn't because of how expensive it was.

Starting point is 00:50:20 They would have been like 3,700 a month. Yeah, so you're renting now? Yeah, and it's only 200 right now. So what I'm getting at here is I'm just wondering if the first move is a move out of the area to a less expensive area, because you can nurse from anywhere. And I'm wondering if that's the first move

Starting point is 00:50:39 so that you can get a salary that you can actually live on and start to save some money. And then once you can get your hands around that margin, now we can actually start to save up a decent amount way more quickly than we could in Salt Lake City. Now this dream of saving up some money to pay for this master's program actually makes sense and heck maybe your husband will make a little bit more money too. That's a good point. Yeah.

Starting point is 00:51:04 What's he doing for work? I'm an operating room nurse right now and we do make really good money traveling. The problem is his traveling is not consistent. What is he doing? Why I looked into this program, it's not consistent. What is he doing making $43k? He's a manager at a storage facility. Okay, what does the track look like for him to move up or get a different job that can

Starting point is 00:51:32 make more to support the bills while you're in school? I mean, right now he just got a dollar raise. It's one of those facilities that doesn't want to push too many people up if they can help it. They want their market. But I'm saying if he has management skills, then he can be a manager anywhere. And so what are the jobs out there

Starting point is 00:51:57 that will pay $80,000 to be a manager, and now we're able to float the family bills without losing our appreciating asset to go into a depreciating asset, which is the trailer that you'll likely be underwater on and going to debt for on top of still going into student loan debt. You see how this problem is just going to put you in a deep hole that you'll have to really climb back out of on the other side. Mm-hmm. There's nothing there. What's the urgency? Like if you waited, let's say 18 months and you saved

Starting point is 00:52:24 up cash for this program, what would the urgency? Like if you waited, let's say 18 months, and you saved up cash for this program, what would be the harm in that? Right now, I guess the urgency is like we have family and we have, so we would have to move out of this area. We'd have to find a plan to move out of this area to another place and to try to find a job elsewhere. We'd have to reestablish ourselves somewhere else. Whereas right now I'm already in process

Starting point is 00:52:50 and have almost everything all together and I will be applying within the next two months to five different programs, not just in Salt Lake, all over the country. So you would be gone? That would be in person? Yes. Like the whole family would be in person? Yes. Like the whole family would move with you.

Starting point is 00:53:05 It was one where they would move with me. Wow, well then I would be applying to the ones that are more affordable if you can go anywhere. That's what I'm saying. I think the bigger part of this is you've just gotta get out of Salt Lake first. I feel like that'd be my first move is I'm getting out of here.

Starting point is 00:53:20 That way, both of you have jobs that you can do from anywhere. So why not do it from someplace less expensive? Then to George's point, now you can be more urgent about saving up this money and doing this program. And then wherever you've been living, if you get a job elsewhere, you can go wherever the job wherever the job takes you. The one thing I do have to consider is I have to be within a hospital and you would think

Starting point is 00:53:46 like operating rooms, they're everywhere. It's not all the time, not the ones that pay very well. So you have to be within 30 minutes of a hospital to be able to take call and everything. And sometimes that means it's more expensive, unfortunately. Yeah, I get it. We'll do some research on that and see what's available to you because you're the person basically who called it and said, we're up against a wall in Salt Lake City. do some research on that and see what's available to you because you're the person basically who called in and said, we're up against a wall in Salt Lake City. So I'm just trying

Starting point is 00:54:09 to look around and see if I can get you in a better location. And just on a quick search, Mindy, I found ones that are 28 grand total for these programs. Yeah, there's only 13, there's 13 schools in the entire US for this profusion program. And some of them, some of them don't give you masters. If you don't get a master's you can't teach it eventually. Those ones, I think you might be looking at the ones down in Texas. I'm seeing one in Iowa and upstate New York and I'm, you know, I'm not privy to all the certifications needed and if you want to teach in the future,

Starting point is 00:54:45 I just wouldn't get glued to one school that's the most expensive school and go, it has to be this one, it's the one I really wanna go to. That's how we start making bad decisions when we go tunnel vision, especially when we don't have the money. Or maybe it's something you can add to.

Starting point is 00:55:01 Maybe you do the profusion one where you're not a teacher and then maybe it's something you can add on the credentials to be able to teach it later. I don't know. I truly don't know. I'm just asking and suggesting. Yeah. And I have looked at, I've looked at some of them.

Starting point is 00:55:17 I just don't have all the requirements and it would take longer and more money to get some of the requirements that some of these schools need. The ones that I have looked at. Utah isn't the cheapest, but it's definitely not the most expensive. I've eliminated a whole group of them just because of their expense. Got you. Okay. Well, keep drilling down.

Starting point is 00:55:36 I think George and I gave you some good things to think about. I just feel like we should pause and not... Right now, we're getting starry-eyed and it's an exciting thing to do, but I would pause and get yourself in a good financial situation and just cash flow this and not drop your income by 70% and live in a trailer that wouldn't be my solution welcome back to the Ramsey show I'm George Campbell joined by Jade Warshaw the Ramsey show question of the day is brought to you by WhyRefi.

Starting point is 00:56:07 Let's be real, defaulted private student loans don't go away on their own, but WhyRefi will help you explore a low fixed rate loan based on your unique circumstances. So go to WhyRefi.com slash Ramsey to learn more. That's the letter Y, R-E-F-Y dot com slash Ramsey, may not be available in all states. Okay, today's question comes from Travis in Mississippi. He says, my fiance and I have been together for five years and we plan to get married this summer. But before we got engaged,

Starting point is 00:56:36 I asked her to get a handle on her debt. She paid off her credit cards and told me that she was making payments on her student loans. I felt better about the situation and so I proposed. But I recently found out that she was only paying $20 a month toward her student loan debt. I also found out that other miscellaneous bills are barely being paid.

Starting point is 00:56:58 If the bill is $20, she will only pay a few bucks at a time saying she doesn't have enough to pay it in full. While she constantly orders things from Amazon. Oh my goodness. It is becoming clear that getting on the same page doesn't seem possible. I love her, but I don't know how we get past this. Oh man, this is for Maury Povich. This is like for this is, um, well the big problem here aside from the money, I think the bigger problem is she kind of lied about it, right? She gave you a sense that things were going better

Starting point is 00:57:29 than they were and that she was making more progress than she actually was, at least from your side of things, that's the way it sounds. So there's the one side of it is, hey, you were not being honest with me. That feels weird, right? Going into a marriage. Some financial infidelity here. And then, yeah, then you have the part of,

Starting point is 00:57:47 hey, this girl can't manage her money. What's going on? Being together for five years. Man, I wish this guy was on the phone. Because my guess is you've probably been seeing other things that reflect similar behavior, possibly. He's probably looked past a lot of this because, you know, love is love, but he's asking us, how do I get past this?

Starting point is 00:58:11 I don't know that you can. The reason you're asking us this question is because you can't get past this. This really happened. So there's two factors here, trust and respect. You have lost both for her in over this period of time as she laid all this out, lied to you, you've witnessed behavior. And so I think this would require some counseling. I would sit down and go, what's the root of this?

Starting point is 00:58:33 And is it something that she can get over or is this just who she is and she's made it clear and you need to believe her? At that point, I would say, let's not move forward. Let's pause on the wedding. Let's not move forward with the engagement and that could be it. I mean, you're not married yet,

Starting point is 00:58:46 so if you don't feel good about it, don't do it. Yeah, I wanna know what those conversations are like. Some people, they have such a scarcity mentality, right, that when the bill is due, I'm just gonna pay the bare minimum because I wanna make sure I have money over here because that makes me feel safe. She might have some interesting safety mechanisms within her. It could be financial literacy.

Starting point is 00:59:07 She just may not know, hey, I was on this, you know, payment based program for my student loans and they just said 20 bucks is what you owe and so that's what I paid. And I thought I'm making progress. So yeah, I don't wanna, you know, read too much into it and go, well, she's terrible.

Starting point is 00:59:22 Yeah, just be curious. But I also don't wanna gloss over it. Yeah. And go, well, you'll probably be fine. Just go ahead and get married. The problems will likely continue if not get worse. And so you need to deal with it now, more like yesterday. I would say be curious when you're talking about her, why is it that you're only paying 20?

Starting point is 00:59:37 And get a sense of, is it an internal thing for her or is it truly a cashflow thing? Does she just not have the money? Is she truly broke? And then see if she's willing to do pre-marital counseling. Have you done that? If you haven't, you need to. Yeah.

Starting point is 00:59:51 Yeah, this feels like it's beyond just personality differences of he's the nerd and she's the free spirit spender. There's something deeper here and I wouldn't continue on with this until we got to the root of it. Yeah. Give us a call, Travis.

Starting point is 01:00:03 I like talking about these ones. Let's talk through it. All right. Let's go to the phones. Mike is in Houston up next. What's going on, Mike? Hey, guys, thank you for taking my call. Sure. So long story short, I got four years together with my girlfriend. We have I've got basically twenty thousand dollars in debt left.

Starting point is 01:00:23 I was wondering, should I pause so I can go ahead and cash flow proposal and later a wedding or otherwise I'd be waiting about 10 more months till I finish my baby steps. And ideally I would wanna be debt free, but I don't think- How expensive is this proposal? What's going on?

Starting point is 01:00:43 We going to Disney World? What are we thinking? No, I was just thinking I really wanted to put some money that's that put some money aside so I can Afford a ring and then the wedding obviously will be after that. How much are you looking to spend on a ring? Probably a month a month income. So be about 42 to 44. Okay. And then you're probably going to be engaged for what? A year? I would say that's safe. Okay. A year to 18 months. Okay. What's okay, you said you make 4200 a month. I mean, I would not delay a proposal for debt. But I would want to make sure that you guys are on the same page, and that she understands your financial situation, you understand hers, so you're

Starting point is 01:01:30 not just kind of blindly jumping into this. I would go that far. How much money do you have in savings right now? Savings I have $3,500. Okay. And how much extra can you add each month to that pile if you pause your, if you just did minimum payments on your debt? If I did minimum payments, it'd be about $2,000, $2,000 every month. Okay. So how about this?

Starting point is 01:01:56 Why don't we split the difference? You make minimum payments for one month, you stack up another two grand, now you have $5,500 and we set the budget at $4,500 max for this ring, all in. Okay. And then get the ring and then push play on the debt snowball. And you guys can figure out cash flowing the wedding later on down the road, who knows, maybe family chips in, maybe you guys go 50-50.

Starting point is 01:02:19 Either way, you'll have plenty of time to get out of debt in cash flow or reasonable wedding. So not even worry about the wedding later on, just go ahead and just get the ring, do that, knock that out. Yeah, I wouldn't delay proposing. If you're ready to marry this woman, go ahead and put a ring on it, let her know you're serious.

Starting point is 01:02:34 Otherwise, 10 months from now, she goes, it's been five years dating Mike. Pay him to get off the ladder, dude. I got a life to live. So I think four years is plenty of time. I'd go ahead and do it. And honestly, you could probably find an even cheaper ring. Nobody said you have to spend four grand

Starting point is 01:02:52 except the jewelry companies. I'm saying it. Jade's saying it. Jade wants to blame. It is a month's salary, that's fair. Sure, that's fair. That's the most I would go. I don't do the-

Starting point is 01:03:02 She's been waiting five years. Well, some ladies are like, no, three months salary, minimum. Oh gosh, that might've been me too. I don't know, maybe I'm old school, maybe that's the frugal Middle Eastern in me. I think spending that much. And when you're, are you a young guy, Mike?

Starting point is 01:03:18 How old are you? I'm 27 today, actually. Okay, I like your one month plan. Yeah, happy birthday. As a birthday one month plan. Yeah, happy birthday. As a birthday gift to yourself, go get a ring. In fact, I would get one this month with the money you have, like spend 2,500, see what you can get out there.

Starting point is 01:03:32 And I assume she's gonna wanna say in this ring, or do you feel like you know what she wants? Oh, she basically picked it out. I just gotta go find it. And how much is it? The one that she picked out? I've been impressed. It's like a custom ring, so I'm still like go find it. And how much is it? The one that she picked out. I've been impressed. It's like a custom ring.

Starting point is 01:03:47 I'm still like weird on prices. I think around 35 to 42. It just depends. Okay. Okay. That's what it is. Cause we're looking at custom things. We're looking at just like custom things as opposed to going to retail stores.

Starting point is 01:03:58 And I'm just trying to find the best spot for that. I haven't picked a place out just yet, but. I love it. All right. Maybe Etsy, you know? you don't have to go crazy. Don't get upsold at a jewelry store. That's all I'm saying. What's the diamond?

Starting point is 01:04:11 That's not it's like a manmade diamond. Moissanite. Moissanite. Yeah, that's a great option, too. You can't tell the difference. But you know, in your heart, she'll know the difference. But here's the key. Find a woman who doesn't care, who goes, it's a beautiful ring. Who cares what kind of diamond it is?

Starting point is 01:04:25 I got no one to impress. There you go. That's it. But good luck, Mike. That's an exciting time. That is exciting. I feel like we did a good deed today. We did.

Starting point is 01:04:33 We caused love to take the next step. We did. We did nothing else. Well, on the question of the day, we put the kibosh on love, and then we were able to circle back around. Yeah, this is the opposite side. He's got some debt, and he's like, hey, should I wait? And we're saying, no, continue.

Starting point is 01:04:48 So, oh, love, love is expensive. We don't talk about that enough. Yeah, we don't. And now proposals have to be their own thing. You know what I mean? You got to like rent a bounce house. As long as you have a nice ring, I'm still okay with like traditional on one knee.

Starting point is 01:05:03 Doesn't have to be a band playing in the background or, you know, confetti. Just a nice ring. I have not seen a correlation to the level of, you know, pomp and circumstance to the actual quality and longevity of the marriage. There's no, there's no, yeah. One is not indicative of the other.

Starting point is 01:05:21 But hey, make it thoughtful, make it sweet, make her feel loved and seen. You can, make it thoughtful, make it sweet, make her feel loved and seen. You can't go wrong there, Mike. I hope she says yes. Welcome back to the Ramsey Show. You know, investing may seem complicated or confusing, but it doesn't have to be.

Starting point is 01:05:42 Whether you're a complete beginner or you're looking for next level investing strategies, the Ramsey Investing Hub has free tools and information that can help you invest with confidence. So go check it out, ramsysolutions.com slash investing or click the link in the description if you're listening on YouTube or podcast. Amy is up next in Tampa. What's happened and Amy, how can we help?

Starting point is 01:06:03 Hey, George and Jade. I'm hoping you can help me. I am $28,000 in student loan debt, $25,000 in credit card debt. I am 61 years old and I have nothing saved and it hit me like a ton of bricks and I'm in full freakout mode. Oh gosh. I don't know what to do. Oh, I'm so sorry, Amy.

Starting point is 01:06:30 So what caused the freakout mode? Because for, you know, about four decades, you weren't freaked out. So what caused this turn? My best friend died a year ago and come to find out she had had a major stroke and for some reason that made me think, oh my gosh, what if something like that would have happened to me and I have nothing saved. I mean, well nothing. Are you single?

Starting point is 01:07:01 Yeah, I'm single. And how long have you had these student loans? I went for my master's in nursing about three years ago and quit halfway because it was a ludicrous idea. So I've been paying more than the minimum since then, but I still owe 28,000 in student loan debt. Do you have a mortgage? No, I own no property except my 14 year old Toyota Camry. Okay, so you're renting right now in Tampa? And what are you earning? Yeah, I'm a RN, I work at home and I'm making gross $78K a year. My take home is about $4,700 a month.

Starting point is 01:07:55 And how much are you paying on rent? Well it's funny you should say that. Jade, you're so smart. I moved from an apartment that was $1,900 a month down to another one that was $1,400 a month. It includes cable, it includes internet, all of that. So I have about $600 a month extra, but what I'm wondering is shouldn't I take because I'm 61 shouldn't I take some of that and invest it in a 403 IRA or a 401k just to get something going while I use the other half of it to pay off the debt. I see why you would think that.

Starting point is 01:08:45 I mean, I think everybody wants that nest egg, but here's the thing. You could take that 16 and invest it, but you're still gonna have this debt and we still have the issue of, you know, the biggest line item on your budget is variable because you're a renter. So those are the two things that give me the most pause

Starting point is 01:09:01 about your situation. If I were you, being able to enter into retirement with zero debt and at least knowing that, okay, I'm still healthy, if I can bring in some money, that's great, I hate for anybody to depend on social security, but you'll have a little there. But think about what that would feel like if you still had this debt hanging around your neck.

Starting point is 01:09:21 Now, if you called us at, I don't know, if you were at 81, this might be a little bit of a different call, but you're 61 years old. You still have plenty of time to earn income, pay off this debt, and get yourself in a better financial footing. Do you agree?

Starting point is 01:09:40 You're 61. You got time, girl. So here's, let me tell you the current plan you're on, Amy, and you tell me how you feel about it. You said you have 600 bucks you can throw at the debt. Is that on top of the minimum payments? Yes. Okay. What's the minimum payments on the debt?

Starting point is 01:09:58 Well, I have nine credit cards. So the total for the minimum payment is $1,492. And that's on the student loans as well, that's everything? No, the student loans are, the minimum payment is $297. So the total for that is $1,751. Okay, and then you said you have an extra 600 bucks. And that's not including the monthly bills, right. Okay, so you can put about 2,300 towards the debt a month.

Starting point is 01:10:27 That includes the minimums plus the extra. Yeah, that was including the monthly bills. Yes, but I'm saying total towards debt, you have your minimum payments plus you said you have 600 bucks extra to do something with. Right, correct. Oh yeah, yeah. Okay, so get this. Oh my gosh.

Starting point is 01:10:40 If you follow that through, 2,300 bucks a month, you have 53 grand in debt, you'll be done in about two years at this rate. If you throw every single dime. And that's assuming that you don't- I have money. Yes. So here's the thing, now we go, okay, two years,

Starting point is 01:10:55 that's a long time. I wanna get investing. So now we go, cool, how can we speed this up? Are you able to work any overtime? Or can you pick up any other gigs as an RN? I have a autoimmune disorder that keeps me from being on my feet. And the company I work for, which is a insurance company,

Starting point is 01:11:16 won't let me work for a competitor. But I'm wondering, I thought about getting like a side gig as customer service route because I work 14 hour days. Yes. So I have three days a week that I don't have to work. Well let me just show the math on it. Yes, love that. If you could do a side gig that pays 600 bucks a month, 150 bucks a week, that's reasonable,

Starting point is 01:11:40 right? Right. That would speed up your debt payoff down to 18 months. Oh. Yes. Right? Right. That would speed up your debt payoff down to 18 months. Oh. Do you see how I'm getting excited for Amy? Now that means 18 months from now, we can begin building our emergency fund so that six months later, two years total,

Starting point is 01:11:55 you're back to investing 15% of your income, which you've never done that in your life. So let's do the math on that. No, I've had chill bumps. We love to hear that. So now you're six, let's paint the picture. You're now 63 years old and you're investing 15% of your $78,000 income, right?

Starting point is 01:12:11 That's if you don't get a raise. Well, yeah, that's true. That's about 12 grand a year, about a thousand. So Jade's gonna punch the numbers in from age 63 to 73, let's say. You invest a thousand dollars a month and you see a rate of return on average of about 10%. That's what we've seen in the US stock market,

Starting point is 01:12:29 if you're investing in good mutual funds. So Jade's gonna tell us how much you have. That's at 73. So you're gonna have to work a little longer than the average person, but for a late start, let's see what your nest egg becomes. You're gonna have about a quarter million dollars

Starting point is 01:12:42 in that one account. Oh my gosh. I told you it's not too million dollars in that one account. Oh, my gosh. I told you it's not too late. So that's I mean, that's more than most people have in their retirement accounts, sadly. So, Amy, even for a late start, you can make a whole lot of progress. Mm hmm. Mm hmm. Guys, I can't thank you enough. I am I am pumped.

Starting point is 01:13:01 I mean, I am ready to throw money at this debt. Yeah, you are. You just needed a few cheerleaders. Let's get her done. You need some people in your corner, Amy. You have anyone cheering you on in your personal life who can keep you accountable, keep you excited? My son. My son can do that.

Starting point is 01:13:16 How old is he? He is 35. Love, that's about my age. Is he financially responsible? Not at all. We have a history of no financial literacy in my family. How about this? What if we make it a competition? Exactly. Oh, that's a good idea. You're going to let a 61 year old beat you? Come on, step it up. That is a great idea. And I think if he sees me do it, he'll get pumped up as well.

Starting point is 01:13:48 I don't know if people get this excited on your show. They should. They need to. You know, Amy, it doesn't happen as often as you think, but what it does, it gives us great joy. Oh my gosh. I want to give you a gift. I want to give you a gift.

Starting point is 01:14:02 I want to make sure you and your son have a copy of Total Money Makeover, because I think that the more you dig into this, Amy, you're going to get more and more excited. You're going to see what's possible. And that's just going to let your fire to go even faster. So we'll make sure you have that. We'll make sure you have the new EveryDollar so that you can do your budget in style.

Starting point is 01:14:21 I love that. And will you call us back when you're debt free so we can celebrate with you? I promise. I promise. Thank you so much guys. I'll be marking the date 18 months from now. I'm gonna wait for Amy from Tampa. There she is. Yes. She's not even 63 yet and she paid off her debt. Let that be a reminder to all of you that if you can still fog up a mirror there is hope yet. So don't give up. I know you spent 40 years making poor decisions, not investing, hanging around with debt,

Starting point is 01:14:50 but it's never too late to get out. You can still retire with dignity. You can still live a life of peace with less stress. It's available to you, but you gotta be willing. Amy was ready. She was ready. She had the enthusiasm we need. When the student was ready, the teacher appeared, and we're happy to be cheerleading her on.

Starting point is 01:15:05 Live from the Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by bestselling author Jade Warshaw, and we're taking your calls at triple 8, 825-5225. We're gonna kick this hour off with Ava in Los Angeles. What's up, guys?

Starting point is 01:15:24 I'm George, and I'm taking your calls at 888-825-5225. We're gonna kick this hour off with Ava in Los Angeles. What's going on, Ava? How can we help? Yes, hi, I'm trying to see if it's worth me possibly filing bankruptcy or just really grind it out and just keep paying debt. Give us the 411. So I make a hundred and forty two thousand a

Starting point is 01:15:48 year. I'm a single parent. My credit cards are about a hundred thousand dollars. I took out a home equity line of a hundred and twenty five to build a guest house in my backyard. My mortgage is about $4,800. I try to keep my savings between 9,000 and 12,000 because I'm terrified of going below that number. So I know now I'm at 10 and I get paid in a couple days. What's your average paycheck? What was 142 a year? It's about 12,000 a month. Eleven something.

Starting point is 01:16:38 Oh, that's your take home pay is 142. Oh, no, that's that's my salary. So take home after pension and insurance, I net probably about 9,000. Okay. And your mortgage is almost half of that. Or over half of that. It is half, yeah.

Starting point is 01:16:59 What's going on there? It's the HELOC. Cause that doesn't include the HELOC payment? That does not include the HELOC payment? It does not include the HELOC payment. Oh boy, it doesn't. Oh gosh. So what got you into this very expensive home as a single parent?

Starting point is 01:17:15 At the time, my debt to income ratio was higher because I had a lot of student loans. But since then, a lot were forgiven thanks to the former president. I still have about 15,000 left in student loans that did not qualify for anything. So I only put about 3% down on the house at the time. Okay, and you're in California, homes are expensive in the LA area. How many kids do you have that are living in the house?

Starting point is 01:17:44 One. Okay. So, each? And because it was 3%, I had to get a PMI insurance. And in order for me to get rid of that, I refinanced. So my interest rate went up from, I think I was 3% at the time, it went up to about four, nine currently.

Starting point is 01:18:04 Okay. oh gosh. All right. How old's your child? 11. Okay. Okay. So this is what's getting me. You're terrified of having less than 12 grand

Starting point is 01:18:16 in the bank account, but you're on the verge of bankruptcy with a quarter million dollars in debt. Yeah. If I had to play which one's more terrifying, I'm going with the latter on that one. I mean, the way my credit card payments are set up is like I'm never paying every credit card at the right, at the wrong time

Starting point is 01:18:37 and I pay more than the minimum. I am able to now set up the guest house to generate income as like, you know, a short-term rental, which is Going to be great. What was the purpose of the guest house? To generate money and so now you're able to rent it have you found when will that happen? Probably the next couple weeks once I get everything set up and final permits and things like that through this date No permits that could take a while Yeah, and how are you vetting this tenant who will be renting it?

Starting point is 01:19:12 I'm hoping the apps or the websites help that part because I'm also terrified of squatters, which is a huge Yeah, she is There's a lot of risk here to spend 125 grand to hope to make a little bit of money. Because what's the HELOC payment? That's $1,100. And that's got a fixed rate on it? That's a fixed rate, yes. Okay.

Starting point is 01:19:36 And what could you charge rent for this place? In the LA market, probably $2,500. I mean, it'll be brand new new so that would be really competitive to get that amount. If I do short term rentals, probably equal that. If I do hire on the weekend. This is like in your backyard. How do you feel about short term rental with a kid in the house? It's a detached garage. I thought about mean, I thought about all these things. Getting a part-time job, which is really difficult

Starting point is 01:20:09 with my work schedule. So- But you make great money. I don't think income was the problem here. Right, a lot of it is when I got the house, it sort of was a fixer-upper. So the first year I spent like eight grand getting new plumbing, and then I needed to get an air

Starting point is 01:20:25 Air conditioning that was eight grand and then there was other issues with plumbing So it all just really added up and so what do you owe on the house total? Since I did the refinance I owe about 650 and what's the house worth if it were to sell today? minimum And what's the house worth if it were to sell today? Minimum $9.85 or over $1 million. Here's my thing. It was peak $1.3 during the pandemic. What I'm worried about is your mortgage right now is over 50% of your take-home pay. It's a lot. That's my biggest problem with this.

Starting point is 01:21:02 I also wonder about, I mean, this is your life, but I wonder about the short-term rental thing with a kid around. It feels risky. Let me just put it like that. I'd be wondering if there's a situation where you can get in a better living situation for cheaper that's not eating up all of your margin every month. Like renting an apartment.

Starting point is 01:21:27 Yeah, majorly downsizing. I would do that way before I would even consider bankruptcy. See, I'm scared if I get out of my house, I'll never have a chance to buy another house in LA. And that's not true. That's you living in fear. You're literally trading one crazy fear for another. And you're living out a crazy fear right now. And you're living out a crazy fear right now.

Starting point is 01:21:46 And you're like, I'm fine with this. Cause you're thinking in the future, you'll never be able to have anything again. And you'll never be able to do this. And I'm like, no, let's set yourself up to where you can. And you can do it the right way without all the stress and the burden that you have today. How old are you?

Starting point is 01:22:02 Early forties. Early forties. You've got time. I feel like that's like my theme today. You've got plenty of time. Let's play this out a little bit. Let's say you sell this house for a million bucks, right? And let's say you walk away with, I don't know, 350

Starting point is 01:22:18 out of that. What would you do immediately? Well, we'd secure an apartment for you and your 11 year old. You'd pay off the credit card debt. All right, now you're at 250. You'd clear the HELOC, I guess, when you pay that off. So we'll drop that down.

Starting point is 01:22:35 And now you've got $15,000 of student loans to clear. Now that still leaves you with a decent amount of money. I never even touched your 10,000 of savings. That sounds like a way that you could start to rebuild. You still have about six figures sitting in the bank. Yeah. And then you begin to rebuild the down payment, which you're gonna do easily,

Starting point is 01:22:54 making 142,000 with no debt. Yes, I even thought if, even if I get a different place, could I, I could rent the house and the guest house and still have that thing. I would not go rent and keep your mortgage and keep the HELOC and keep the debts. You need to let go of this dream.

Starting point is 01:23:11 Think about this. If you cleared a thousand bucks a month from this rental of net profit, it would still take you 10 years to ROI after you spent the 125 grand to make it happen. And we're getting you free and clear plus six figures in the bank to restart. Think about it. Think about how.

Starting point is 01:23:30 I would sell before bankruptcy and you make it 142,000, I think you're gonna have a hard time. They're gonna force you to sell all of your assets before they let you consider it. Bankruptcy is gonna cost you thousands, it's gonna destroy your credit for the next seven years, likely. So this is just not a shortcut that you need to be exploring when you make great money and you got a way out.

Starting point is 01:23:56 Buying or selling your home is a big deal and you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey Trusted program is the only way to find a top agent you can trust who will help make your home a blessing, not a burden. It's super easy. You can compare agent profiles, interview them, and choose the right one to work with. You can find a local Ramsey Trusted Real Estate Pro for free at ramsysolutions.com slash agent, or click the link in the description if you're listening on YouTube or podcast. Jennifer is up next in Springfield, Illinois. What's going on, Jennifer?

Starting point is 01:24:29 Hi, thanks for taking my call. Absolutely. So my daughter at 17 years old bought an old camper and her and her dad gutted it and turned it into a food truck. She just turned 18 and- Hello? Hey. Oh, yeah. She just turned 18 and... Hello? Hey. Oh, yeah. Oh, sorry.

Starting point is 01:24:46 She just turned 18 and it's been her first full season and is doing great. My question is she does not want to go to college or, you know, pursue business. And her dad and I are just having a difficult time with that decision. And do we just encourage her to keep going with this? I mean, she's an entrepreneur, obviously she's doing good, but it's very different. She's got the best education out there. It's called real life experience.

Starting point is 01:25:10 There's people with business degrees that want to start a food truck and don't know how. Well, give us the definition of great and successful. What is she doing? What's she earning? What's it look like? So this is her first season, so she does different events and and like she'll be stationed

Starting point is 01:25:26 in a town one day a week anyway she makes about a thousand dollars a day but that's uh she still has to take her costs out of that so maybe comes home with eight six to eight hundred dollars an event per event and how many events does she do a month um so far we're at, I mean she's just getting started, but maybe she's done six so far this month. Okay. And some in May. Of course we're in Illinois, it's cold so you shut down in the winter. And she works hard, other jobs, she takes other jobs.

Starting point is 01:25:59 So she's a hard worker. It's just to not get educated, is that wise to be like, go for it? I mean, for $3,600, I think it's not worth it. Listen, I think that it's great that she's doing this. I think it's great she's doing this experience. But the way the call started, I thought that she was like rolling in the dough on this thing.

Starting point is 01:26:23 But really it's just likened to a really great part-time job or a really great, you know full-time job that's at her terms It's not all year round So is there a way that you can encourage her to maybe get an education? That's working towards this and maybe she does this in the summer months when she's out of school and she continues She opens back up the food truck that sort of thing when she's out of school and she opens back up the food truck, that sort of thing. Yeah, we're definitely encouraging her to do that. We're like, you could pay your college

Starting point is 01:26:49 completely with this job, you know? Yeah. And that's if there's something she wants to pursue that requires a degree. So I'm not a fan of just go to college so that we can say you went to college to get a piece of paper. We have millions of people who did that

Starting point is 01:27:02 and now feel like they were lied to and they're stuck paying the price with no job on the other side. And so I think your daughter is proving what a lot of the Gen Zers are, is that there's a non-traditional path that might be upsetting to the parents because it's harder to brag about,

Starting point is 01:27:17 but I would be happy to brag that my 18 year old has a successful business. And let's ride this out. Let's say she does it for a year and goes, you know what, this isn't for me. The winters were slow. It doesn't make as much as I wanted. It's a lot of work.

Starting point is 01:27:30 I gotta be there in person. I don't wanna delegate this. It was a fun experiment. That's okay too. But I don't think there's any rush to go. You have to go to college today. Well, was there something she wanted to pursue and then got starry eyed with this food truck?

Starting point is 01:27:44 Well, was there something she wanted to pursue and then got starry eyed with this food truck? No, she's just always been she started during COVID she started making masks made $5,000 doing that and then went on to another make it she's just that way and You know, I think the problem is she just It's just scary to send her out into the world like, go, you know, I didn't know. We are kind of from the generation where you do need a degree and that's not the case anymore, I realize.

Starting point is 01:28:14 But. Yeah, listen, I think I'm with George then. You know, if it wasn't, if it wasn't like she was on this track and then she had this success and you feel like it threw her off track, it doesn't sound like that. It sounds like she's been this way

Starting point is 01:28:26 and had an entrepreneurial spirit from a young age. And so in that case, yeah, why not let it ride? And my guess is she might be a serial entrepreneur where she jumps from one thing to another and eventually she'll land on something that really takes off. It might be in the food world, it might be something else. But what we do know is that she knows how to make money

Starting point is 01:28:46 at a very young age without a piece of paper. And so I would let her follow that passion, let her follow that thread. And then if she's 25 and decides, all right, I'm done with that, I really wanna pursue teaching or nursing, schools will always be happy to take her money at any age. That's great, thank you.

Starting point is 01:29:04 She's doing all this debt-free? That takes it better. Yes, she is. to take her money at any age. That's great. Thank you. She's doing all this debt free? Yes, she is. And she uses the money that she makes to update her equipment. And so she's not got a lot in savings yet because she needed better equipment, but just starting and trying to do it all with cheap stuff

Starting point is 01:29:20 and then upgrade as she needed to. I cannot think of a better education than having her figure out how to cashflow all of this, how the P&L works, the profits, the revenues, the expenses. This is the real-life application of what they're teaching in college if she were to go get a business degree. And you got to tell us what's her specialty, like what can I get if I show up at this food truck? She makes everything from scratch. It's called nourish. And she does little scriptures. She puts them on her stickers that go out. And she makes like sandwiches, amazing drinks, sparklers.

Starting point is 01:29:55 She makes smoothie bowls. Wow. Or health, try to healthy, not, you know, fried. Not like her normal food. I love it. That's great. That's so good. And worst case, she can go work for someone else if she wants to. It sounds like she loves the food world and there's a lot of room there for opportunity for people like her.

Starting point is 01:30:15 All right, well, that's good. I'll pass that on. I feel great about this. So you can at least know she doesn't have to go. Yeah, and whatever she does, if she's doing it out of her own volition and doing it with cash, let it ride. Yeah, that's great. I she's doing it if she's doing it out of her own volition and doing it with cash Let it ride. Yeah, that's great. I'm the least worried about her

Starting point is 01:30:31 You raised a really incredible woman Thank you. Congratulations. Well, I feel better. Yeah, I love it. What a cool bonding experience with your dad Like what a cool story to get the thing with your dad and start this business, especially at 18 Yeah, I'm scared to see where she's gonna end up at 25. We'll all be working for her one day. That's so, so cool. I love that for her. And Nashville has this a lot where I love the idea of starting with a food truck

Starting point is 01:30:54 versus buying a brick and mortar restaurant, hoping, because the food world has one of the highest turnover failure rates out of any industry. Yes, restaurants, yes. And so it is one of the scariest, riskiest things you can do. So starting with cash, starting small with a food truck, those are my favorite stories.

Starting point is 01:31:10 And a lot of Nashville restaurants started as a food truck. It took off, they used all of the cash to start the brick and mortar business, then they can expand to another location if they want. And growing slow is the best way to grow. Moving at the speed of cash, it's good. Just like that, I love it. Should we take a social question for fun? Yeah, do a social question, I love those. And growing slow is the best way to grow. Moving at the speed of cash. It's good. Just like that.

Starting point is 01:31:25 I love it. Should we take a social question for fun? Yeah, do a social question. I love those. Do we have them? I think I have them. I've got them here. Somewhere.

Starting point is 01:31:32 There we go. All right. I'll let you hit me with a surprise. Let's see. I did a couple of these yesterday. Let's go with this one. It says, I love working to support my family, but is the love of earning money

Starting point is 01:31:43 as evil as the love of money? What? That's very existential. In the clouds, yes. I feel like I need Aristotle and Socrates here to duke this one out. I mean. So they're saying is it bad to enjoy earning money?

Starting point is 01:31:59 I think he's confusing with, if I love earning money to support my family, do I have, is it evil? Is it like the love of money? Well, let's play it out on the opposite side. If you don't earn money and you can't support your family, I would say that would be the evil side. Yeah, to just not provide when you've brought

Starting point is 01:32:18 these humans into the world and brought a wife on board. So are you, I think the motive is important. Are you doing this out of greed? Are you not even being with your family and you're doing all this under the guise? All personal gain. Well, I'm supporting them, so they should appreciate it, even though I'm working 80 hours a week,

Starting point is 01:32:34 because I want to, because I'm addicted to work. So I think we have to separate it. Are you addicted to work? Are you wanting the greed that comes with making more and more and more, and you can't be content? Or is it truly just hey? I want to support my family. I want to make good money doing it. I want to give them a great life I see no problems there. Yeah, I think it's a question of is it

Starting point is 01:32:53 Self self less or selfish if that's the gain and if yeah the goalpost is constantly constantly moving for you to get this thing Yeah But yeah, it's an important distinction. It's not that money is evil, it's the love of money. Yeah, yeah. And that's where things like greed and pride come into play. Or that scarcity, I gotta make more, I gotta make more, it's never enough. That's when I would hit pause. Sing, I was gonna do the harmony, but I won't.

Starting point is 01:33:20 I'll spare you guys listening. But I won't. I'll spare you guys listening. Welcome back to the Ramsey Show. We always love a good debt-free scream. And on the debt-free stage in the lobby of Ramsey Solutions, we've got Robert and Angela. Welcome, guys. Hi. Welcome.

Starting point is 01:33:40 Congratulations, you made it. Thank you. We're marking the moment today. How much debt did you pay off? $25, you made it. Thank you. We're marking the moment today. How much debt did you pay off? Twenty five thousand dollars. Nice. How long did it take? Twenty eight months. Awesome. And what was the range of income during that time?

Starting point is 01:33:54 It was steady at sixty six thousand. Good job. And where are you guys from? Ceres, California. Wow. Quite the journey to celebrate with us. We love that. What kind of debt was the 25? It was a few credit cards, including one that actually we owed more on than our car and a car that then died a year later with a blown head gasket. Oof. Okay, so how long have you guys been married?

Starting point is 01:34:18 Eight years. Eight years. And you started this journey 28 months ago. So you're a few years into this thing. What caused you guys to go, we got to do better. We got to do something drastic. So I lost my baby sister in August of 2022 to cancer. Thank you. And while I was mourning her, when we went to see her, we had to put the entire trip on a credit card. And it was almost like insult to injury,

Starting point is 01:34:43 but I didn't know what to change to get better. And then one day I was producing Facebook and a friend of mine made a post about how different his life was from two years before, because he had paid off all of his debt and mentioned the total money makeover. So I ordered the book on Amazon. I had to make myself read it.

Starting point is 01:34:59 I would set timers, only got to like baby step three, and then I sat him down. And I said, look, we need to make a change. I'm really concerned that something's gonna happen to you before we can get this debt paid off and I can't do this by myself. And he's like, all right, let's go. Yeah, Robert, how'd you feel about that? Shocked.

Starting point is 01:35:17 Were you just kind of like, all right, if she says it, we're doing it. Like, are you that kind of guy? He was like, if you've got more energy than I do toward it, I'm just gonna go with it. I'll just put all my faith into her. Wow, that's a good man. I love that, wow.

Starting point is 01:35:29 All right. So he's on board, you're on board, you get after it. What did that look like for you? I mean, was a big part of it budgeting or what did that look like? Yeah, so we were doing, like he likes to say, 2086 things with our money all at once and none of it was working.

Starting point is 01:35:41 So it was more about getting organized, getting on a budget. And then I was also only working part time so I went full time at work, started picking up extra shifts as well and it was game on. Wow. And what, like going part time to full time,

Starting point is 01:35:55 what was causing you to go part time originally? I had never done that kind of work before. I'm a housekeeper in a hotel. I had never done that kind of work before and wanted to kind of get used to it, but at the same time I was like, now we need to make this change. And so it was really only one day a week difference.

Starting point is 01:36:10 I went from four days to five, but then I started picking up a sixth day every so often as well. So was it kind of addictive once you got on the plan to go, like what else can we do? How much harder can we go? How much faster can we go? Absolutely.

Starting point is 01:36:22 Wow. That's something. And where are you guys at now? What's the next thing you're doing? There's a professional goal that I have that I want to chase after we're finished with Baby Step 3. But then we want to buy a house. Yes.

Starting point is 01:36:34 I love that. California, that's going to cost you a pretty penny, no matter where you are. And that's the next goal. You got the Baby Step 3 underway. Is that done? It is underway. Now we're about a third of the way through it.

Starting point is 01:36:45 Awesome. That one can be a slog. After paying off debt, which is so exciting, Baby Step 3 is like this, is like watching paint dry. I'm just stacking the cash. But I'm so proud of you guys. In Total Money Makeover, you would say was the thing that got you on the plan.

Starting point is 01:36:59 Yes, and then I started listening to the show. And you just gave Robert the spark notes. He didn't even have to read the book. You were like, here's what we're doing. Yep, I took notes, I sat him down, I said, here's what this is, I think we need to do this, and he's like, let's go. You said, if you said it, I believe it, I'm doing it.

Starting point is 01:37:14 What was the hardest sacrifice you had to make? The car. When the car died, we had bought a beater. And so driving that beater around was like, oh boy. We're still driving it. We just got it in September. So driving that beater around was like, oh boy. We're still driving it. We just got it in September. It's a 2009 Chevy Avio.

Starting point is 01:37:29 Oh yeah, that's a beater. That's what's up. So is the plan to upgrade that now that you guys are debt free? Not now, later. Once you're out of Baby Step 3. That was a trick question. You answered correctly.

Starting point is 01:37:40 Angela, this is a woman with a plan. This is a woman on a mission. Don't cross Angela. Yeah, you could feel invincible now. Did with a plan. This is a woman on a mission. My goodness. Don't cross Angela. Yeah, you could feel invincible now. Did you guys have cheerleaders in your corner or was this kind of a secret thing just between the two of you? My friends all think I'm weird.

Starting point is 01:37:53 Was that before the debt-free journey or is that now after too? Both. Okay. Nothing changed though. Nobody in California knows who Dave Ramsey is. Oh boy. You're spreading the word now. You got the shirt to prove it. You got the shirt and everything.

Starting point is 01:38:04 That's amazing. Well, how does it feel now that you guys are completely debt-free? Oh boy. You're spreading the word now. You got the shirt to prove it. You got the shirt and everything. Yeah. That's amazing. Well, how does it feel now that you guys are completely dead free? How do you explain the emotion to someone? Amazing. Like, a load I didn't know I was carrying has been lifted. Wow. And how about you, Robert?

Starting point is 01:38:16 Is your life any different? Not really. You're like, well, she's happier now, so that's nice. Yes. Robert seems like the most even keel guy. Like we could be in an apocalypse and Robert would be like, ah, everything's fine. He's happy, wife happy life.

Starting point is 01:38:31 He's like that meme. Oh, I love it. It takes a lot to check me up. I love it. Well, hey, we got a parting gift for you. We got two every dollar premium subscriptions, good for a year. You can pass that along to someone who said you're weird,

Starting point is 01:38:41 you can use them for yourself. Do what you will with it. We are so proud of you guys. Thank you. Okay, you ready to do this? Yup. Came all the way here, might as well. Yes, let's do it, let's do it right.

Starting point is 01:38:51 We got Robert and Angela from California, 25,000 paid off, lot of credit cards, bunch of car loans, driving the beater car, going full time, doing whatever it takes in 28 months, making $66,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Starting point is 01:39:10 Woohoo! All right! Another one bites the dust. Look at that. All right, man. Even people in California, they're getting hit with it, Jade. They're going, look at it. They're starting to catch the message.

Starting point is 01:39:18 I mean, the taxes are killing you. You might as well free up some of your money. I know, that's right. I know. I know. I know. I know. I know. I, they're getting hit with it. They're going, we're getting rid of this debt. I mean, the taxes are killing you.

Starting point is 01:39:27 Might as well free up some of your money. I know, that's right. That's real talk. I love it. Just another story of someone else getting the job done. Yeah. I like it. 28 months, think about that. That's not a long time.

Starting point is 01:39:38 No. It's gonna fly by. So do you wanna be debt free? The time's gonna pass anyway. Or do you wanna be where you are today? That's right. You get to choose. I love? The time's gonna pass anyway. Or do you wanna be where you are today? That's right. You get to choose. I love it.

Starting point is 01:39:46 Let's get back to the phones. Andrea is up next in Miami, Florida. What's going on, Andrea? Hey, so I am just, I guess, disagreeing with my husband right now. He is active duty military, and he's wanting to buy a house and sell each time we move.

Starting point is 01:40:05 And I just don't think that's a smart financial decision. Well, you are right, my friend. So he wants to be a real estate mogul. Well, so we initially what started this is I had $160,000. We needed a qualified expense to get it out of the investment account that it was in. We put it into this house down here in Miami, and I'm just worried about all the fees that come with buying and selling.

Starting point is 01:40:29 And just maybe we're not gonna be able to sell. Yeah, we never recommend being a long distance landlord, and especially for military folks, if you know you're not gonna be planted there for five plus years, it is not wise to buy a home. Especially in those areas, because there's a lot of movement. And so those areas are not the hottest real estate markets

Starting point is 01:40:48 for that reason. And so I would very much caution him against this whole plan. I don't know if he played a lot of Pokemon growing up, but he's trying to catch them all. That's not what you want to do in real estate. It's two different mindsets. The mindset that you go in to a property

Starting point is 01:41:02 that you're purchasing, that's going to be your primary residence is very different than the mindset that you would go in looking for a rental, looking for the area, you know what I'm saying? So this two birds with one stone thing is a really bad idea. And all it's going to do is you're going to collect a bunch of mortgages and then hope to make a spread on the rent, which there's going to be a lot of supply. Yeah, I think he's not so much right wanting to rent. He wants to buy and then sell. And I think what a lot of other military members do, they use their VA zero percent down. And then essentially they're getting that basic allowance for housing

Starting point is 01:41:38 and they're pocketing it instead of giving it into rent. And so then everybody thinks that they're saving that money or they're pocketing that money by putting it into a mortgage versus into a rental. Hmm. So I think they're hacking the system by doing this VA loan trick. Oh, well having zero percent equity. Yeah, I think that's kind of where his mindset is. There's a lot of risk with these VA loans putting nothing down, having no equity, hoping

Starting point is 01:42:02 that the market shifts in your favor within two or three years. There's just way too much risk. And I don't want you guys calling back five years from now going, we created a nightmare. We have five properties all over the country. What do we do? We can't handle this.

Starting point is 01:42:16 And then you got to offload them, you know, for way less than you paid potentially in short sales because you need to get out. So. How long is your average stay before you move? Well this one will sell our house so we bought the first one down here in February and that'll be a little after two years. Yeah yeah I would I like the rental plan or you know something to where at least if you are buying, you're making the plan. We're not keeping these houses.

Starting point is 01:42:45 We're offloading them when we move because the goal is not... What do we say? It's not Pokemon. You don't have to catch them all. Yeah, exactly. I would not be... This is not a game of Monopoly. And so I would caution them against it. I don't know that I can convince them, but I think Andrea can.

Starting point is 01:43:00 A lot of risk here. Our scripture of the day, Proverbs 16, 11. A just balance and scales are the Lord's. All the weights in the bag are His work. Margaret Thatcher said, pennies do not come from heaven. They have to be earned here on earth. Good job. Chew on that one, Jane. Yeah, she did. We'll get it later tonight.

Starting point is 01:43:30 I got it today. I got it now. It'll take me a second. That's a good one. Michael is in San Francisco up next. What's going on, Michael? Yeah. Hey, thanks for taking my call. So I've been, I have been debt free for over 10 years. But I live in California and my expenses are going up. I recently had to take on some debt for some home repairs that we've been putting off for a long time. I've also got more expenses coming on the home repair front and some kids on their way to college.

Starting point is 01:44:09 I am based in the San Francisco Bay area. My business is, I'm self-employed. My business is dependent upon the tech industry and there's a lot of uncertainty in that industry now. My projections for my business dropped by, I don't know, 30, 40, 40%. Oh boy. This year alone, and I'm not sure

Starting point is 01:44:32 if I should stay in California or if I should be looking for, you know, someplace with a lower cost of living. Tell us a little bit about what you're in debt on the home repair and what that's gonna look like finishing the repair, and tell us a little bit about what your income is from this tech business. Sure. So I anticipate the repairs are going to be a minimum of 30 grand and we don't have that cash. My, and you asked, sorry, the revenue of the business.

Starting point is 01:45:02 Yeah. Well, what's your, what's your income? What do you take on? Yeah, so last year it was just over 200. This year it'll be, you know, maybe 120, 130. Oh wow. If I don't recover, you know, the lost business. What was your best year? Last year. I've been self-employed for about five years. The first two, I invested some

Starting point is 01:45:27 savings. So I had some savings invested up that kind of floored us through. Third year broke even. Last year kind of started to break out and I was on my way to a good year. But, you know, there's been a squeeze on budgets in the valley and my clients are feeling that and that's kind of having a repercussion back on me. Yeah, there's part of this where, you know, what's keeping you in California? It's so expensive for you. You're making good money, but I feel like you can make $120,000 in a lot of parts of the country and slowly build it back up to 200, depending on your know-how

Starting point is 01:46:06 or if you set up a business elsewhere. What do you think is keeping you there? So I'm originally from California. I have deep family roots here. My family was, you know, my kids were born and raised here. I've traveled a lot. I have, you know, I've lived in the South, lived overseas, and in addition to the family roots,

Starting point is 01:46:32 I think it's either habit or just kind of a personal preference. And you're married? Happily married for 18 years. Okay, and is your wife working? She works part time and she brings in another 20. Okay what would it look like for her to work full-time if the kids are going off to college? Would she be willing and able? Yes and you know we're looking at that the difference is her

Starting point is 01:46:58 you know her potential income is a fraction of mine and when we look at the opportunity ahead, well that and then the answer is yes absolutely she's putting in more hours she's taking on more hours and as the kids move out of the house that'll be easier for her to do but my potential for income you know exceeds the 200 in the past I've you know made even more than that I I'm obviously not self-employed because now I've got my own expenses, my own health insurance. But our thought process generally leads towards

Starting point is 01:47:33 what can I do to increase our income? Yeah. What kind of debt are you in right now? None except for, so the roof repair had to go on a HELOC, so we just refreshed our HELOC, 10-year HELOC. You know, that's an 8.3. And what's the balance on that? About 18 to 20.

Starting point is 01:47:56 Okay. Because my concern is you had your best year ever last year and it still wasn't enough to cash flow the repairs, which tells me that it's not an income problem. And so I would, obviously you live in one of the top three most expensive areas in the country. And so I'm not trying to say that, you know, this is a major part of it, but is there also lifestyle spending,

Starting point is 01:48:17 other things where it's just kind of that lifestyle creep, you make more, you spend more, and now it's hard to backtrack. Yeah, I'm fully aware of that risk. I mean, generally, we operate extremely frugally, so we have been in debt in the past. None of us likes it, and we worked really hard to get out of it. The cash flow issue for last year really had to do with, so I've been working with a tax preparer who was not experienced in handling my type of business and self-employed and escorts.

Starting point is 01:48:50 So I got hit, you know, I had 20 grand in the bank, but then I got hit with a big tax bill, which again, leads me back to, you know, California taxes, California real estate expenses. So that may be a path out because we can re-budget and squeeze our expenses down. You know, I'm now, I've fixed the tax issue but still you know we were just about breakeven and with the loss of income which again I'm investing in my business, I'm looking to go up market, you know, I primarily work with smaller companies in the valley, I'm investing in my business. I'm looking to go up market. You know, I primarily work with smaller companies in the Valley. I'm doing mid market.

Starting point is 01:49:29 You know, artificial intelligence is a threat. And could you- That's kind of what I wanted to ask is, is there feasibly a way to bring this number back up that's dropped by 40% or is it that AI is kind of stealing your model and you need to find new cheese? So I think, so it's a little bit of both. I think over the next two years, I mean, so the short answer is I believe I can absolutely get back to 200 and beyond. But it is going to require me changing, you know, it's going to require a new pipeline, it's going gonna require me changing, you know, it's gonna require a new pipeline, it's gonna require me targeting a new market,

Starting point is 01:50:07 it's gonna require me developing new services, all of which I have a high degree of confidence that I can do. Okay, that's good. But it takes time. Could you also go work for a company and keep this business on the side? It's very alluring and I love that idea

Starting point is 01:50:24 and the short answer is yes, except, you know, layoffs, it's mostly layoffs and there's a ton of, I mean, I have more experience than most. I've been independent for a while, which makes me, you know, more attractive, but you know, there's not a lot of, well, I have not seen a lot of hiring to date. That said, you know, last couple of weeks,

Starting point is 01:50:44 I've seen a lot of people get placed. It's just getting, you know, getting, it's a little bit of a trade-off of, you know, do I spend my time, my free hours, you know, that I'm not billing? Do I spend it on looking for an ex-client, which has the potential for a real upside? Or do I spend that on a job, which is gonna, it's a little tough for me to take a full-time job and keep my side business. And I'm reluctant to do that because I've spent so much time and effort building. I just don't want to see you continue using this, you know, HELOC to go into debt to cover

Starting point is 01:51:18 the repairs if things get tight. It feels like your wife stepping in into a full-time role. Like you said, it's gonna be a fraction of what you're earning, but it could close that gap a little bit. So like to your point, you can track down more leads and secure more clients to kind of grow this percentage a little bit for you.

Starting point is 01:51:37 I would at least start with that action and see how that gets you guys. And then the second, well, really the first action is let's look at the budget. Let's crunch our lifestyle way down. Then wife's going back to work full time and see if those two actions don't clear up enough margin for you to cashflow the rest of this project. Is it just the roof?

Starting point is 01:51:58 Is that what you're doing? You have to replace the whole roof? Yeah, and I mean, desperate need of a paint job. I mean, you can see the woods. We need to, and we're kind of in the sun, so we need to do that. That's gonna be another maybe six to eight. Okay, so let's force rank these things

Starting point is 01:52:13 of what's most important. And then, yeah, we're going through the list and cash flowing them. Obviously, the things that are must haves are the ones that go first. And then other things, they might be smaller projects that you can break into chunks and kind of quell that amount a little bit. But I would clear that HELOC, get this emergency fund in place and cash flow the rest as you

Starting point is 01:52:32 can and that's gonna take keeping that income up and your wife working full-time. Best of luck Michael. This is the Ramsey Show.

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