The Ramsey Show - App - My Grandmother Wants To Control Money That She Gave Me (Hour 2)

Episode Date: February 24, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Ken Coleman, Ramsey personality and career expert, host of the Ken Coleman Show, author of the number one best-selling book, The Proximity Principle, is my co-host today. So you've got questions about career, about jobs, well, you can mix those in with the questions where we talk about life and money.

The phone number, 888-825-5225. Ann is with us in Orlando, Florida. Hi, Ann. Welcome to The Ramsey Show. Hello. Thank you so much for taking my call. Sure. What's up?

Well, I'm a widow, and I just am really concerned about my future. On a positive, I just received a $10,000 check in the mail. On the opposite end, my primary mortgage was just sold to a lender that I'm not comfortable with. I need a new roof, and I have a HELOC. So I'm considering refinancing all of that together. It would also be at a much significant interest rate. And then taking that $10,000 check and throwing that at the credit card, and I have a bonus check next month that I think will take care of the one other debt that I have.

Is that a good plan to get me set up so that I can retire well in the future? How old are you? I'm 53. Okay. And what do you make? About 63 a year. Okay. When did your husband pass?

He passed five years ago. Okay. I'm sorry. Sounds like you are really on top of things. Proud of you. Very well done. I'm trying. Sounds like you are really on top of things. Proud of you. Very well done. I have my moments. I like everything in your plan except borrowing to do the roof. Okay. So your plan is really good. You need to get rid of that HELOC and that higher interest rate mortgage by refinancing and get a cheaper rate. I love that part of the plan. That's really good. The $10,000 towards the credit cards makes a lot of sense.

Is the roof leaking? It is not, but locally a lot of the insurance companies are requiring that people re-roof their homes, and the roof on my house is probably about 20 years old, so it's getting about time that it's going to need to be done. Okay. Do you have a bid on it? I have people coming out next week to give me bids. Okay.

How big a house is it? It's 2,300 square foot, but I also have a 600 square foot lanai, and that just has a different type of roof. Yeah. Is it asphalt shingle roof? Yes, it is. Okay. All right, cool. You make 63, and you have how much credit card debt?

There's 17 on the card. Okay. And that, cool. You make $63,000, and you have how much credit card debt? There's $17,000 on the card. Okay, and that's your only debt other than your home? I have one other debt. I still have $1,200 left on the monument for our grave site, and I'm anticipating being able to pay that off next month with a bonus check. Okay. How much is your bonus check going to be? It varies, but generally it should be about a net of $1,300. Okay.

All right. So we've got, counting the $10,000, we've got $11,300. We've got a $1,200 bill and a $17,000 bill. Right? Yes. Okay. So let's get in attack mode, knock the little bill out, and let's get those credit cards knocked out, make sure they're cut up,

finish paying off that debt, build your emergency fund, and then build your roof fund. And refinance your first and your second together. I don't want you going into debt further on this house because part of your retirement plan is getting this house paid off. Yes, it is i have a lot of equity in the house and i should still be able to get the house paid off in 15 years yeah well you yeah you're going to because you're not going to borrow for the roof yeah so yeah we're going to put this on a 15 year and you're going to be done with it sooner than that and you're going to save up and pay cash for this roof and you're going to put this on a 15 year and you're going to be done with it sooner than that and you're

going to save up and pay cash for this roof and you're going to be able to make all of that work because you're going to lay out a detailed plan and um the good news about you is you are really paying attention i'm very proud of you there's not anything happening on accident here you've spent a lot of time thinking about this and it led you to really good conclusions except for that one detail and so you know you really have done you know you really smart when you came on the air but everything you're going doing is in the right direction joseph's in kansas city hi joseph what's up good afternoon gentlemen yes sir honor to be talking with uh with you and i can on the show today you too this is more of a mindset question more than do we have the funds.

Okay. I have actually been unemployed for 10 months. My wife has been working. I do collect, basically, we've saved money aside to build a home. And we've been saving for over 20 years to actually buy or build a newer home. And now it's come time. I inherited property three years ago. And it was actually burned down piece of property, but beautiful piece of land.

And, you know, we currently own our home now. We have absolutely no debt. Live an old Dave Ramsey way. You know, our newest car is from 1999, but we keep it running. So we're looking for actually some guidance beyond family because everyone else in the family says live on debt. We do not believe in that at all. We have absolutely no debt.

So regarding this, it's more of a mindset question. We've been saving for 20 years. Actually, we have the cash to build a home, but we're just having such a hard time of actually signing that contract to go ahead and begin to build. Why? Because it's been over 20 years of saving, living very frugal, way below our means. Which would make me want to sign that contract and get this crap done.

That's a good point, Dave. And, you know, both of us, we've never made more than $20 an hour. The house bill itself is going to be about $240,000. How much is in savings? We currently have $416,000 cash. In retirement, we have $308,000. Okay. So what is it that's scaring you? It's the fact of I just have not ever made a whole lot of income, and it's going to take a long time to replace that $230,000, $240,000 that we're going to be spending. So primarily it's a matter of finding another position.

I'm actually starting my own investment advisory firm. I've been financial coaching no fee for years, and it's something that I love to do, but I'm still looking for employment. Well, if you want to wait until you get employment and that gives you the sense of stability to do this, that would not be illogical. But, Joseph, here's the deal. You've got plenty of money, but if that's the last emotional hurdle

that says, you know, I really want to have a job before I break ground on this thing, there's nothing that says you have to start today. Right. And, Dave, I've got to address this. Joseph, nothing that says you have to start today. Right. And, Dave, I've got to address this. Joseph, when Dave asked you point blank what the fear is, it's I've saved so much money over so long a period of time, and once I spend it on this house, it's gone, and it's not.

Let's say that 10, 15 years from now you want to sell that house. That's going to appreciate you paid cash for it, if I'm understanding that right. That money's coming back and then some. Yeah, and the home you're in. Yeah, it's perfect. Yeah, and the home you're in is paid for, and it turns into a really nice rental property, I suppose. Yes, sir. It's actually a little two-bedroom home.

Joseph, do it, man. It's going to be a great rental property. Do it. You're ready to go. If you want to wait until you get a job, that's fine. But you're ready to go. There's nothing financially till you get a job that's fine but you're ready to go there's nothing financially out of place here it's just hard you're right it's hard to turn loose so you took you a long time to get here and you kind of like that pile of money being

there yeah and uh that's a normal human reaction so but it's you did it you you this was what you did it for now enjoy the fruits of your hard work and discipline. Listen, this is important. Are debt collectors calling you at work? Are they reporting errors on your credit report? Folks, that's not just wrong. It's illegal if you think you're being harassed take a quick survey at collectionbully.com to determine whether you're a victim of illegal debt collection harassment if you are collection bully will help connect you to a consumer law attorney in your Learn more and get the help you need at CollectionBully.com.

Ken Coleman Ramsey Personality is my co-host today. Open phones at 888-825-5225. Amelia is in Boston. Hi, Amelia. How are you? Hi, Dave. Hi, Ken. I'm well.

Thank you for taking my call. Sure. What's up? So I'm calling in today to get some guidance on getting on the same page with money as my grandmother, actually. She has given me a very generous gift and put it in a trust for me of $100,000 earmarked for tuition and for a purchase of my first home when the time comes. So we've taken chunks out of that over the years for tuition, and there's about $75,000 left. I personally, outside of that, am just about to finish Baby Step 3, so I'm looking to purchase my first home in the next one to three years. Now, the question here that's causing some contention and disagreement is that that money is all invested in the market, mostly in index funds right now. And with me wanting to use it in the relatively

short term, my position is that we should take it out and have it in cash. While my grandmother's position is, you know, it's done well, it's earned great returns over the last several years, why would we not want to continue that? So I'm looking on guidances to how to have that conversation and do what I believe is the right thing with this money while, you know, still being extremely grateful for the gift. She gave you the money, and she put it in trust, and she's managing the trust. Correct. She's a bit of a control freak. I think with money, it's mainly a position of experience.

You know, I'm 22. She's 74, so she's got a lifetime of experience and it does seem to me a bit controlling you know i'm a natural saver been financially responsible you're in control and the money was given to you to buy a house and you can't take it out and buy a house with it right i don't understand yeah uh i mean that's that's the point that i'm stuck at is how to have that conversation um so are you when are you going to buy a house um probably in two or three years why two or three years uh because i'm not sure that i want to stay in this area long term so uh you know i'm waiting to get a little confidence there before I make the financial commitment to a house.

Okay. Well, this is more of an issue of, you know, puppet master than it is actual financial advice. Right. And so that, you know, you just got to decide which hill you want to die on. As far as the, you know, her advice advice goes it's not the end of the world okay let's say that those index funds went down 10 during that three years which would be one of the worst three-year periods in the stock market's history sure then you would have lost seven thousand dollars right yeah it's not end of the world either way yeah and so and if it goes up 10 during that time

you would have made seven thousand dollars so you know your fear of this money not of this money being in the market is not substantial shouldn't be substantial because the actual dollar figures aren't going to be substantial her wanting to take advantage of the market is almost laughable because it's also going to be about $7,000. Right. It's a philosophical thing, you know, is really all it comes down to. So, you know, and that reveals that you guys are both being drama queens about this. Yeah, that's fair to say.

Yeah, it's, you know, it's not a big deal either way, but it's difficult to have the conversation. Yeah, it's just like, it's a control conversation. It's a puppet master conversation. And, you know, so, like, I don't know if this woman is actually going to release this money when you're ready to buy a house. I can't tell. Yeah, I'm sometimes worried about that because she's actually taken out the growth that's already come onto the account over time. Yeah, exactly. Oh, she took it out and used it herself.

Yeah. Wow. Yes, which, I mean, the original balance is still there so that was her call but wow yeah that was not something i was about to say just a little strange so here's what i'm gonna do i'm just go about the business of building up your own down payment and then if that money's there and she wants to give it to you fine if not just tell her to keep it yeah absolutely that's fair enough that's's pretty much the plan either way. Yeah, because I don't think you're going to win this argument one way or the other.

Because the problem with her actually letting you buy a house with the $75,000 is that's the last conversation she has where she gets to tell you what to do. And she really likes telling you what to do. Okay, so I've got to ask you this. I'm surprised at your answer. I was a little surprised. Is it great? I mean, it's dead on, but I thought, don't you just die on that hill with Grandma?

You told me this is what it was for. I'm not going to fight with you and ruin our relationship. That's it. That's it. Yeah. I mean, because, listen, you can hear what's happening with this lady, and there's no winning the argument with this woman. 100% agree. Okay.

So why have the argument? Because you're not going to win it. Right. You're either going to sever the relationship over $7,000, and the money's not the thing. It's the control. And then the other side of that is, if I'm making a gift, if I'm the grandma, okay, I've often said on here, you're going to get my money, you're going to get my instruction. But I have never given someone a gift and then managed it. Right.

That's not a gift. Yeah, that's controlling. But I would say I'm not going to give you this gift if you're not doing these things. But once it's given, you need to take your hand off of it. I agree. So you're saying don't even try to have the conversation and go, hey, listen, I don't want to fight. I don't want this to go sideways. I just say, Grandma, I love you and thank you for the money, and I hope it's there.

If you still want to do it when we get ready to buy a house, that'll be fine because we're going to go ahead and start building up our own down payment. I know you'll be proud of us when we did that. I love you. Thank you. And just keep moving. Because what it does is it takes all of her power away, and she really is a lot about power. That's true. What happens if Grandma dies before this?

I suspect the trust has terms that leave it to the beneficiary of the trust, which is Amelia. Okay. That's good. I needed to process through that because sometimes it's like principle, let's have the conversation and I think you're right. Now as I process what you said, it's like- I'm channeling my inner John Deloney. Just tell him you love him and keep going.

I think you're right. I was wondering though. I was like, okay. I'm trying to be nicer. Deloney's inspired me to be nicer. He's very nice. He is a nice guy. He's very in touch with his feelings and ours. He's in touch with everyone's feelings. He really is. He's very nice. He is a nice guy. Very in touch with his feelings and ours.

He's in touch with everyone's feelings. He really is. He really is. That's good. And he has a lot of feelings. Yes. He's not even here to defend himself. I'm ragging on him.

No, he's awesome, man. He's great. I love it. Regina is in Nashville. Hi, Regina. How are you? Hey. Fine, Dave.

Hi. Thanks for having me on the show. Hello, Ken, also. How are you guys doing you? Hey. Fine, Dave. Hi. Thanks for having me on the show. Hello, Ken, also. How are you guys doing today? Great. How can we help you? We're short on time. Go straight to it.

Okay. Straight to it. All right. I'm unemployed. My husband just got a job about three weeks ago. We moved from California to the Murfreesboro area in October. I'm having a heck of a time finding a job. We owe a ton in taxes, and our finances are a mess. What did you used to do?

Well, my last position, I was an office assistant. I've basically been in office for about the last 20 years. My goal is to become a loan-f signing agent within the next couple of months. So I'm looking for something to tide me over until that can be enough of an income so that I can do that. Well, then here's what you do. So, Regina, let me encourage you. This is a really good job market in Tennessee

and certainly in the greater national area, and you need to be just getting a job or two right now. You've got an income problem, and so you can deliver pizza. You can show up and work at a grocery store. You can work at a warehouse. Don't just limit yourself to office management positions when that's going to be a short-term play, it seems like, for you anyway. Right now, this is urgency, and so we're going to go get a job, two jobs, three jobs.

Just go get a job. Get stable, and then get back up on the horse towards that purposeful plan. Do anything. Yes. So that you can do anything later. That's right. Work like a crazy person. And, yeah, there's positions out there, lots of them, in the Murfreesboro area.

Murfreesboro's booming. Booming. But you need to broaden your focus to almost anything instead of so narrow so you get landed in, get the wolf away from the door. Because you've got this wolf howling outside, and it's driving you crazy. This is The Ramsey Show. 2020 is finally over, but there's still a lot of work to do in 2021. Here at Ramsey Solutions, we are working hard, and we need people like you to join us on our mission to change lives. We're hiring designers, marketers, writers, sales reps, and tons of engineers. We're paving the way with our digital products, and we have massive goals to deliver hope to millions of more people this year. And you should know, while we always work hard, we also have a lot of fun.

Our 1,000 team members get together for weekly staff meetings, monthly celebrations, and epic annual events. We volunteer on company time at local charities and nonprofits because we value giving to the community. It's simply who we are. It's also why Ramsey Solutions was named Best Place to Work in 2020 by Inc. Magazine. So join our team here in Nashville, Tennessee. Apply today at DaveRamsey.com slash careers. Ken Coleman Ramsey personality is my co-host today.

Open phones at 888-825-5225. Jonathan and Rachel are in Bowling Green, Kentucky. Says on my screen, you guys are ready to do a debt-free scream. What's up? Hey, how are you? Great. How much debt have you guys paid off? We've paid off $102,000 in two years, so 24 months.

Way to go. And your range of income during that time? So we started at about $75,000. By the time we were done, we were around about $115,000, and now we're back down to about $70,000, but that will be going up soon, we hope. Good, good deal. So what do you guys do for a living? I'm a dental hygienist.

And I work for UPS. Very good. But while we were paying off our debt, I was a dental hygienist, but me and Jonathan, we both worked at a restaurant together. He was the kitchen manager, and I was a waitress, which I've done for several years. And we worked countless hours. Between the two of us, we usually work about 60 to 80 hours a week so it was wow definitely hard how old are you guys um we're both 29 very good and how long you've been married oh this year will be eight years we've been married yeah so what happened two years ago that lit you up you got on fire um well it's funny i i was scrolling through um facebook one day and we watched uh i watched a youtube video of someone doing their debt-free scream. And I just remember thinking, there's no way we could ever do this.

But I went ahead and bought your book, and it literally took me a whole year before I picked it up and read it. It makes a great coaster on a coffee table. It actually was. And so I read the book, and the next day I came to Jonathan, and I was like, listen, I think this is what we need to do. And first he was like, okay, we can do it. And then it was hard at first. And then one day I came to him, I was like, listen, we cannot be working in restaurants for the rest of our lives. It's not what we want to do. And he was like, okay, we'll buckle down.

And we did. And that was two years ago that you went crazy it was two years ago that we went crazy yep we remember every moment of it yeah and you did fifty thousand dollars a year for two years that's impressive you sure did i mean you've been on beans and rice rice and beans for sure we sure did um there was many many times we worked seven days a week for the most part. You know, with Jonathan, he would get up some days at 6 a.m. to go to work, and we wouldn't leave until 1 a.m. for the restaurant. So it was difficult. It was rough.

Yeah, and it's over. It's over. Will you ever go back in debt? Oh, never again, never again again what kind of debt was this um it was several things we had uh student loans mostly and then uh cars and credit cards not a whole lot of credit card debt though and we had a little bit of medical debt i think mostly it was um our student loans and car loans so we had a lease at the time, which was very dumb. Wow.

I'm so proud of you guys. Well done. Thank you. You are not afraid of hard work. No. We are definitely not. And you're not afraid to work together, and these are very important things. So what do you tell people the key to getting out of debt is?

Because you did it. Honestly, it's just staying focused. It really, I don't know i tell people it really wasn't that hard once we put our minds to it you know we we worked a little bit more but we were already working so much that it just you know it kind of after a while it came natural it was actually kind of fun you know every month we'd just pay off i mean more and more would go towards the snowball and it was just it was it was kind of fun. Yeah. Well done. Well, I want to ask a question to both of you, because this is something that I think

people need to catch. The fun part was the momentum each month, but there have got to be times when you're working that kind of schedule where you go, I know why we're working this hard. I don't ever want to have to work this hard again. Am I right? You are absolutely right um jonathan's been lucky um going from working 80 hours a week to until he starts in his full-time position at his job he's down to 20 hours a week and this is everything he's ever dreamed of was

to work less well i'm hoping you've taken a few naps jonathan because you've earned oh every day oh good okay that's good to know that's good that's so great well done you guys who were your biggest cheerleaders other than the two of you oh gosh definitely my mom for sure um your parents yeah my parents both of our parents have been really supportive through the whole process we we really didn't have you know i know a lot of people they go through the debt-free journey they have some naysayers we really didn't. We had everybody was so proud of us, on board with it, so that helped so much.

My mom and dad, I mean, my dad would text me or message me every so often, how much longer, how much longer? I'm like, we're getting there, we're working on it. I'd love to ask both of you, how has your relationship grown when you've come together so intensely on such a big goal and worked so hard? How has your relationship, your marriage grown? I'd say it's definitely grown a lot closer. We've always had a great relationship, but it's just a lot of give and take and a lot of working together, and this has definitely helped strengthen that, I feel like.

I mean, I think it's helped us a lot because we've been able to, we knew we were putting in an equal effort. You know, nobody, we didn't give up on each other. We didn't, you know, as many times as we wanted to say, okay, well, let's go buy this. It's like, no, I mean, if you don't get something, then I'm not going to get something. So I think that really, really helped. You know, it helped strengthen our relationship. It helped us keep us motivated.

What are you dreaming about? People are hearing this story. They're watching this on YouTube. What are you dreaming about now that you're on the other side of this as a couple? Well, we eventually want to have kids, so that'll be, you know, we wanted to kind of get out of debt to do that. But our most reachable dream right now, we need to fix our shower. So that's what we're saving for now.

That's our dream. All right. We'll take the little dreams. That's what we're saving for now that's our dream all right we'll take the little dreams that's good that's good that's a good first step well done you guys very well done you're impressive young rock stars yeah you got a bright future ahead of you you know how to work together and you know how to work and uh and you know how to execute and lay out a plan and execute on it you You can do that with any part of your life now, and you'll be able to do this for the rest of your lives. Absolutely. Very well done.

Excellent, excellent work. New grooves are in your brain. You are ready to rock. We've got a copy of Chris Hogan's book for you, Everyday Millionaires. That is the next chapter for you. And let's count it down. I love it.

$102,000 paid off in two years, making $75,000 to $115,000 a lot of work. Jonathan and Rachel, Bowling Green, Kentucky. Count it down. Let's hear a debt-free scream. All right. Three, two, one. We're debt-free. Yeah.

Thank you. Well done, you guys. We're so proud Thank you. Well done, you guys. We're so proud of you. Excellent. You know, we had some friends over for dinner the other night, two couples, and we were telling old stories from when we were that age, because that's the age we were when we were bankrupt. And the guys, like like one of the one of

the men sitting there was quizzing sharon he's doing the interview routine right and uh getting her side of the story yes because everybody everybody hears my side of the story all the time sharon's sharon's great people don't realize how fun she is when she answers questions she's like oh it's a yellow pad and he said what do you mean she said well when we we make a we every night we sat down with this stupid yellow pad and wrote out a plan of what we were going to do this week next week and what we're going to do 10 years from now and she said we kept writing that yellow pad and we kept writing that yellow pad and we were you know the way we got through bankruptcy and the way we rebuilt our lives was with a freaking plan and doing it together.

And it's a yellow pad. And, you know, she can see it in her head. And I can see it. I remember that little oak table. We're sitting in that little oak pedestal table. And we're sitting there with that yellow pad going, okay, next thing is fix the shower. That's what made me think of it. You know, it's stuff like that.

The first thing, you know, before you start talking about being a millionaire, you fix the shower. It's the truth. I thought it was a great answer because that shows the sacrifice. Yeah. They literally, rice and beans, working themselves to the nub. They did not fix the shower. No.

This is awesome. What a great, great couple because that's exactly what we did. We had to fix the roof. We had to fix the heating and air. Dadgum air conditioner was out. You and I have talked about this a lot. How good is that shower going to feel? Not because it's working, but because of how hard you work.

But if you went down to Home Depot and put it on a Home Depot card, it would spit acid on you. Yeah, it's the truth. It would be like shards of glass. It'll never work. Oh, my goodness. This is The Ramsey Ken Coleman, Ramsey personality, is my co-host today as we talk to you about your life and your money. The phone number is 888-825-5225.

Scotty is with us in West Palm Beach. Hey, Scotty, how are you? I'm great, Dave. And, Ken, both of you, thanks for taking my call here and helping me out. Sure. How can we help? I'm a new sole proprietor, and I set up my business checking and savings account. Good. But the bank named both of them as my DBA, and I was under the impression from you that it should have, like, XYZ Corp tax savings account or something to that effect.

Oh, no, no. It doesn't have to be named that by the bank. You just got to nickname it that on the file. Oh, okay. Because I didn't want, you know, the IRS to say, well, you have a checking name for you and you have a savings name. No, no. The IRS never sees any of that. All we're trying to do is make sure you set aside money out of your profits for taxes

so you can pay your quarterly estimates, and you just need a savings account to do that. And by that, I mean a separate savings account that you're not saving for something else in, and so you accidentally spend your tax money when you buy the something else. Right, and that's what I've done. Yeah. Totally separate. So then the last question is, after I take that 25% out, since I'm just a sole proprietor, what's the best way to pay myself?

Just off the business, the debit card, or do I really need to set up with a payroll company? No, you don't need a payroll company. You can just write a check out of your account. So you're a startup one-man show, right? Yes, sir. Okay, what kind of business are you doing? What are you doing?

I am starting a small messenger career service. Okay, cool. So you get some money in, and you throw it into the checking account. When you get ready to bring some money out of that checking account home, you set 25% of that amount over into that savings and the other 75 comes out in a just a personal check written to you okay out of my business account yeah you're right so you take your business account there's a thousand dollars in there that you want to bring some home out of that business account and pay some bills or eat and some stuff like that then you would

write a 250 check into save and move it over into that savings account. You'd write a $750 check and take it home. Now, does it strictly have to be a check? It couldn't be just how it was offered? It could be anything. However you're going to do it. I mean, how are you going to transfer? You could just do a transfer if it's on your website.

But just always keep that 75-25 rule going because, in effect, you are withholding like your employer withholds on you. They hold money out for taxes. And that's what we're doing with that 25% going over into savings. Right. And then that becomes my quarterly. Exactly. And that becomes the quarterly exactly and that becomes and that becomes the equivalent of a payroll company doing withholding that's why you don't

need a payroll company at this stage fantastic i wouldn't screw with a payroll company until you have employees got it and then it's very good then it's worth it using one to not have to mess with the irs calculations for all the, which would drive you freaking bananas. That's another story, though. Yeah, that's – But very wise. You have listened to some of the Entrez leadership materials very carefully, Scotty, and you've done a great job with that.

So, Ken, the reason we've instructed people to do what Scotty's doing that are opening solopreneur things is the number one cause of small business failure, and especially a solopreneur crashing, is cash flow problems. Cash flow problems mean you don't have any money. Why don't you have any money? Because you didn't pay your taxes and you get behind with the IRS, or you go into a bunch of debt. Yeah.

And so what we've instructed here is, this is a situation, we didn't get into this part of the conversation, but if this is a side hustle for a while you know if that's the situation and you have a day job then i would just keep loading up that bank account and and and until it can until you're paying yourself something that you really can use uh just get that company healthy in his situation where it may feel like he's doing this full time uh and giving it a go, having that tax and pulling that aside and being disciplined there, that's going to help you tremendously as you learn the ropes of this. Because the first time you start a company, you realize there are tax benefits. Get yourself a great Ramsey tax advisory.

Get somebody who really knows what they're doing to make sure that you're protecting yourself. Because people don't realize when they work for a regular company where people pull all this out. They just don't think about it. They see the number. Anything that's a 1099. Yes. I mean, if you're running Uber Eats. Yes.

Same thing. And they're not holding taxes out on you. You better pull it aside. You know, you run $10,000 up. You're going to get a $2,500 extra tax bill at the end of the year, and you got no money for that. That's going to bite you in the butt. Yep. And that's what happens in a small business solopreneur startup like that.

You can get behind on those taxes because you act like they're not there and live off of all the money. That's right. And that's a bad plan. Yeah. And don't pay yourself. I get this call a lot on the Ken Coleman Show. I just want to point out, if you don't have to pay yourself right now

and you can live off that day job, do it. Yeah. Stack some money up in that side hustle. Yeah, and just let it sit there. Or pull it all out and throw it on your debt, if that's what you're doing it for. If you're in the debt snowball, absolutely. Put every nickel towards it after taxes. Archie Alley is with us.

Hey, Archie Alley, how are you? Hi, I'm doing well. Thank you for taking my call. Good. Pronounce your name for me. I destroyed it. It's Araceli. Araceli. Okay, thank you. It was just the C. Thank you. That was pretty good. I messed it up. Okay, but it's aerosol a aerosol okay thank you it was just the sea that was pretty good

i messed it up okay but it's somebody's name it's important no no no i i've gotten aerosol and that's great well i didn't do that yes all right how can we help i have a predicament i'm in the middle of a divorce. I get to keep the house. My girls are staying with me. One's 19, the other one's 17. There's no alimony or child support or anything into the equation. The house is paid in full. And I am going to pay him out $200,000. So my question is whether I take out a loan to pay him that amount or my attorney indicated I could take out penalty free that money from my 401k. I don't know what to do, which option would be better. Lose the interest on my 401k by doing that or have this other loan which with all the uncertainty of me now being head of household and having all the bills and everything um when about 120 okay well i hate how you got here i hate how you got here but if you call me up and said i have a

$200,000 mortgage on a 15-year fixed rate, and I make $120,000 a year, and I've got two teenagers, I wouldn't be panicked hearing that. But I don't like how we got here, obviously. You don't either. It's been painful. Exactly. I'm just, you know, I've always had the cushion of having him as a backup. But me now being the sole head of household.

Yeah, how old are you? And that free would give me 50. Okay. So, I mean, if you take out a 15-year mortgage at 65, the house is paid for or sooner if you pay it off early, right? Yeah. yeah and as the kids grow and move out you know you're going to have more margin and room in your budget to throw serious money at this house and get it paid off early so yeah i think you take out a 15-year fixed rate mortgage okay and don't listen to your attorney for financial advice he's not very smart no it was just because my i't, you know, coming into having all this obligation now on me and the responsibility, I wasn't.

If you told me you made $70,000, I'd be telling you to sell the house. You understand that? Yeah, yeah, definitely. Because you couldn't afford to live there because of this horrible situation you've gone through. I'm so sorry. Right. Thank you. No fun at all.

How long were you married? 22 years. How are you doing? Hanging in there. Sounds like it. Yeah. Here's what we're going to do. I want you to go through Ramsey Plus for a year.

I'm going to pay for it, which puts you into Financial Peace University and puts you into Every Dollar Premium and shows you how to handle money because somebody needs to give you a hug right now, and that's me and Ken, okay? Thank you so much. I appreciate it, and I appreciate this advice. I've been one day debating one option, one day debating the other, and I'm just trying to figure out long-term what would be the best. Well, the problem is none of these options are wonderful

because of a less-than-wonderful situation. And so it's not good. But you're going to get through it, and we're going to show you how, and we'll walk with you. You know, I'm sorry. That puts this hour of The Ramsey Show in the books. Did you know you can listen to The Ramsey Show on your smart speaker? Just tell Alexa, Google Assistant, or Siri to play The Ramsey Show podcast.

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