The Ramsey Show - App - Stop Justifying Your Business Debt! (Hour 2)

Episode Date: February 17, 2022

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. George Campbell, Ramsey personality, is my co-host today. As we talk about your relationships, your mental health, your money, your job, your career. We talk about your life all right in front of you. You. We talk about you right in front of you.

Open phones at 888-825-5225. You jump in, the call is free, and some say the advice is worth exactly what you pay for it. Rachel's with us in Kansas City. Hey, Rachel, welcome to the Ramsey Show. Hi, Dave. Thanks for having me on. I'm such a big fan. Well, I'm honored.

How can we help? I wanted to get your opinion on my husband and I's living situation. We're currently on Baby Step 3B, and we found out a month ago that my husband has cancer. So that's why, yeah, that's why making the decision on where to live is kind of a little bit more complicated. Yeah. But we kind of have a couple options. We could either re-sign our lease, which is increasing to be about a fourth of our take-home pay, and just break it if we find a house. The other option is both of our parents offered for us to move in with them

to help save money until we find a house. But I honestly just wasn't sure if we should continue our house search, getting the diagnosis and potential medical bills and things like that. Well, that's a real scary word you're throwing around. What is the diagnosis? What's the situation? He has stage 2 non-touchkin lymphoma. Okay.

Me not being a medical person, tell me what you think that means for your home for the next two years. What's he going to go through? Well, right now he's declining radiation treatment, but it might change in a year or so. The doctor said we could just wait and see, like it could just go away on its own, or we could just wait and watch it as an option.

So we were kind of thinking that unless it gets worse for right now so this is not life-threatening um no it doesn't sound like it but um well certainly if you're declining treatment it's either devastatingly life-threatening and you just don't want to go through the treatment or it's not life-threatening at all and you're not worried about dying otherwise you take the treatment right i don't know how this works but help me with it right yeah my the doctor said that since um he's so young that he has seen it just go away before and he said that anything past stage one he wouldn't recommend treatment for it so um he kind of changed his opinion now and we're kind of getting second opinions on what where we're going from there but okay yeah i want to settle this before i make a decision on housing okay because when i hear cancer i hear you got a fight on your hands

and it doesn't sound like that i was right it sounds like you may not have a fight on your hands so i mean if you're getting ready to go into like two years of chemo and we're going to be concentrating on beating cancer it's going to take money and spiritual resources financial resources emotional resources it's going to require everything you got in which case you don't need to be buying a house but if that's not what's going on this sounds like you know you're acting like he's got the flu here i can't i don't mean to be so i don't mean to be sarcastic but i don't i'm not grasping so if um if if it's not if if it's not going to affect your life or his life then maybe we just go ahead and buy okay but i would not go buy a house if you're fighting serious cancer battle yeah yeah for sure

because you're going to need the money and the emotional bandwidth to fight it yeah definitely so i think that you see what i'm saying yeah yeah so i i i and i'm not much help because i don't understand um the the the situation well enough medically to be of much help. I mean, George, do you know when is the lease up? The lease is up in May, but we have to re-sign by the end of February. Okay. Would they be maybe willing to give you an extension because of the health circumstances? I could ask, but I mean, they

haven't been super helpful so far, so I don't know if that's something that would be on the table. Yeah. Well, I just, I mean, I don't know your relationship with your family and if that's going to be, you know, emotionally taxing to live with them or if it'd be a great situation, but it's not an urgent thing where I go, you got to move with the family, you got to save every dollar you can. You guys seem to be doing fine right now. So I think re-signing the lease is a fine idea if, like Dave's saying, we don't know what this is going to look like, we don't know how much money this is going to cost. And renting versus home ownership, it's going to take a weight off of you versus dealing with being a homeowner.

It's got a lot of costs. Moving, buying a home, closing a home, dealing with all the issues of moving, dealing with the issues of maintenance and everything else, I would not put you into a home closing a home dealing with all the issues of moving dealing with the issues of maintenance and everything else i would not put you into a home right now until you get until you get this solved yeah and you and you know that it's in your rearview mirror so either resign the lease or move in with your parents one of the two if you think it's going to be in your rearview mirror in six months maybe you move in with mom and dad for a few months beginning in may and between now and then go ahead and start looking for a house but you do need to get that

second opinion and get a firm prognosis a firm treatment plan that you're all in agreement on and then that tells you how much of an impact this is going to be to your life yeah and then based on that you just say if it's a major impact to your life please do not buy a house while you're fighting it but if it's a minor impact the way you're describing it, which is kind of foreign to me, you can tell I'm a little confused by it. I'm happy that that's all it is. I hope that's all it is. But if it's a minor impact, then maybe you are buying a home this summer.

And, you know, when you may and whatever. Sounds like a landlord. I mean, you have to re-sign by the end of February for May? I haven't heard something like that. That feels real early. You know, it's kind of one of those things, if you can get away with convincing people they have to do that. Sure, they'll do it.

I don't know. There's definitely not a law. That's the policy. I mean, you just do whatever you want to do. Very interesting. Very interesting. Open phones at 888-825-5225. It's tax season, and I don't know anyone who loves that unless you're an accountant.

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ramseysolutions.com and look up ramsey plus We'll see you next time. You've got a lot on your plate, a job, your home, your marriage, and your growing family. While you're enjoying the present, you can't help but think about your future and your finances. As you explore your options, consider Christian Healthcare Ministries, or CHM, for your health care. Their generous maternity program and budget-friendly monthly programs have been a blessing to members welcoming children into their families. Visit chministries.org slash budget to see if it's right for you. Christian Healthcare Ministries is a Ramsey personality is my co-host open phones at 888-825-5225 Sarah is with us and Sarah's in Dallas Texas hi Sarah how are you hi I'm great how are you doing better than I deserve what's up I want to thank you first of all my husband i found you a

few years ago and didn't realize how much debt we were in um with student loans and everything and in the past four years we've paid off a hundred and uh what 160 000 of debt and except for a house we're completely debt free way to go good for you you do way to go yeah it's really exciting and with home values we have a ton of equity in our home now. So it's great. Good, good. So we're at the point now, so we own a small business. We have a handyman at home, you know, repair, home services business.

For the first few years, it was my husband. Then we hired a guy. Now we've got two teams with two vehicles. Vehicles are both completely 100% paid off. But we got so busy over the last couple years, we realized we really need to hire admin people. So in the last few months, we hired one office manager. He's doing all the invoices, all the stuff we used to do around the clock, answering phones, estimates, invoices, and one person that's handling marketing and promotions and our website and all that good stuff.

Wow, good for you. Yeah, so it's exciting, and it's growth, but it's also the first time we've really had overhead. We're like, even if our guys aren't in the field working, we're still paying them salary to be in the office. So it's cutting it a little closer than normal, and we have plenty of business. We have a great reputation. We have the work, but in order to get to the next level in our business, we need to have plenty of business. We have a great reputation. We have the work, but we need to, in order to get to the next level in our business, we need to have a third team. Hire two more guys, get another vehicle.

And then, again, that would add about, our projections would add about another $80,000 to $100,000 revenue, you know, to add another team on. But our problem lies in the vehicle. Right now in the short term, cars are appreciating in this weird market where, like, supply and demand is all wonky. And cars are supposedly going up in value to where we've been searching for months for, like, a Chevy Express, like a small box truck or a Ford Transit. And we just bought one in cash two years ago for $25,000. Now they're selling for $45,000 or $50,000. And we don't have that much cash, you know, just to buy it outright.

Oh, wait a minute, wait a minute, wait a minute. The car market has gone bizarre, but it has not doubled. For the same exact car, it did not $25,000 to $40,000 or $50,000. You were trying to get a better car than the last one you bought. Well, no, they're the exact same. So we bought a Ford Transit, like a 2018, and we bought it right at the beginning of 2020. It had 15,000 miles on it. We've put 30,000 miles on it since then.

And those same exact cars, if we sold it tomorrow, like on Facebook Marketplace or on CarGurus, they're selling for $43,000 to $45,000. Like with the extra miles in used condition, they're selling for more. So we're either going to get that car or we could go up to like a Chevy Express, a little bit bigger box truck, but those are only selling for $48,000 to $50,000. So we could definitely get a smart car because we're looking for used ones. Do you have the money? We have $22,000 in our emergency fund, so not all of it. This is not an emergency. Exactly.

You can't use your emergency fund to grow your business. It's not an emergency. Very true. So you don't have the money. So you don't have the money. Okay. So you don't buy the truck. You don't have the crew. So you don't have the money. Okay. So you don't buy the truck. You don't have the crew.

So continue to save. Just wait. You need to make some money to grow your business. Your business should grow with money it makes. Yeah. So you guys don't do any retained earnings or anything like that? No savings? Savings, like our personal account, you mean?

Mm-hmm. Do you have any money saved that is not retirement accounts? Oh, just the $22,000 in our emergency fund and then the equity in our home. So you don't have the money to do this deal. You shouldn't even be talking about this. That's your personal emergency fund, or is this just for the business? I mean, it's our personal emergency fund, yeah. They don it's our personal emergency fund yeah they don't have they don't have a business emergency fund they don't have any money you know when it's a small

when it's a small business it's like one in the same yeah so here's what's here's what's happening okay uh you're about to step into the classic trap the small business people do all the time you're about to you've gotten so excited about this and you built it up in your head that you're about to step over into stupid to expand your business okay and you're about to go into debt to buy a dadgum truck to add crews and you're not even going to break even on it for two and a half years no well and the only reason we're reason we're not trying to justify it, but we would never do that with a personal vehicle.

It just sits on the drive. This is going to make us money. If we add another crew, that's $8,200,000 revenue. So we're thinking, well, if we have the revenue because we have... That is justifying it. Yeah. That's the very definition of justifying it. Okay.

You're rationalizing your butt off. You're rationalizing your butt off. You're're gonna do this no matter what i tell you please don't do it please i beg you i've grown a 300 million dollar business with cash that the business made one year at a time for 30 years i have not ever borrowed money i'm sitting in a studio that cost two million dollars just for the freaking studio and i i needed the studio to broadcast but we didn't do this until we could pay cash for it and that way when the freaking pandemic hits and all revenue stops i don't go out of business because I don't have debt hanging around my neck for an overpriced truck. Please don't do this.

Okay. Please. Now, here's what you do need to do. I think your prices are too low. Okay. You haven't raised your prices at all in the last three years, have you? Actually, we have. How much?

We have twice. How much? We have twice. How much? It used to be, you know, like 60 an hour per guy, and then it was 80, and now it's almost 95 an hour per. You're doing better than I guessed. I was wrong. I was wrong. You're doing better than I guessed. So your margin should be going up on all this paid-for stuff then, and it shouldn't be that close. It is, yeah.

So what's your top line? What's your gross revenues? About $240,000. Okay, and what's your net on that that you paid taxes on? $140,000. That's a great margin. It's a great margin. Okay, out of $140,000, I want you to start saving money

to buy a used van to add the third crew. And when you have the money, add the third crew third crew and when you have the money add the third crew but not until you got it until you have the money listen here's the thing the businesses that stay open don't run out there on the edge of thin ice borrowing money in order to expand expand expand as if there's no tomorrow because there is a tomorrow and it might have a pandemic in it and then you get yourself in a crack and just don't do this don't do it and you guys you paid off 160k in four years and that tells me you're not scared of doing the hard work and so how quickly could you save up 40 grand if you did that that's 40

grand a year they did it so you know 40 50 grand you can save in a year based on that ratio and you can go pay cash for this van um i gotta tell you i mean she sounds like she's done the research on the van i'm having a real hard time believing that but it may have happened i may just be that much out of touch i am aware cars have gone up considerably on the short term here but i was not aware you know maybe the construction business is completely booming out of control, too, and that's running... Those types of vehicles. It's doubling the pressure on the vans

more than just normal used car pressure. Can you get a cheap pickup truck for now that'll do the job, just for right now? I don't know what you need, really need, to do this. I don't have any idea, but I pay cash for whatever you're going to do. And, you know, you do not justify this. You just worked to get out of debt,

and then you called me trying to get back in debt. What did you expect me to do? And what happens is they go, well, if we got two trucks, Dave, then we could have $200,000 more, and then it starts to get out again. Well, if you got eight trucks, but then you got $800,000 in debt. So you start to get starry-eyed about the potential revenues without looking at the risk. There's this thing, you don't know what you don't know until you're there.

And then you're going to learn. Please, you're just adding so much risk. And they've worked so hard to get out of this debt on their personal side. All right, go back in. Well, it's all personal debt. Believe me, they're not loaning that little business any money at the bank. They're loaning that woman money. She'd be signing personally.

Don't do this. Please don't do it. Please don't do it. Please don't do it. Please don't do it. Please don't do it. You got Dave crying now. It's a bad situation. Don't cry, Dave. No, just whine.

There's a difference. This is The Ramsey Show. We'll be right back. George Campbell Ramsey personality is my co-host today in the lobby of Ramsey Solutions. On the debt-free stage, Abby is with us. Hey, Abby, how are you? Hi, I'm good. How are you? Better than I deserve. Welcome, welcome. Good to have you. So where do you live? I'm in Champaign, Illinois.

Good for you. And all the way here to do your debt-free scream? Yes, sir. How much you paid off? $68,963 dollars and 34 cents i love it good for you and your range or how long did this take you 35 months okay and your range of income during that three years i started out at about 14 and ended at about 65 whoa nice jump well done what kind of debt was the 69,000? All student loans. Okay. When did you get out of school?

2018. Three years ago. Yep. Okay. So you got out of school and game on. Yep. Well, I got to tell you, I actually want a copy of your t-shirt to take home and I'm going to make my wife wear it.

You can find anything on Etsy. It says, because Dave says so. Oh my goodness. Yeah. The chance that Sharon's wearing that's zero, I'll just tell you. But I love it. Very cool. That's amazing.

I bet you get some questions about that. I just got it, so I haven't yet, but we'll get there. We'll work on stirring up a ruckus. Okay, good for you. So the debt was 69,000 student loans. You get out of school and game on. Yeah, so I was in a five-year program, so I could sit for the CPAs. And about senior years, when I started to freak out a little bit,

they sent me a nice little email that said, oh, by the way, your payment's going to be about $650 a month. And at the time, I just had this little part-time job, so not good. So I talked to my sister, and she was telling me about this Dave Ramsey guy. And of course, I said I would go look into it, and I totally forgot about it. But one night, I was laying in bed, and I could not get to sleep. And I thought a nice finance podcast would be the perfect thing to, you know, bore me off. So I pulled it up, thinking it's going to be some, like, scholarly, dry thing.

That's what Dave's known for. Yeah, I'm kind of known for being scholarly. And dry. Dry, dry, that's me. So it came on. This is like 2 o'clock in the morning. The music starts blaring, and I'm like, it's the wrong podcast. It was not, in fact, the wrong podcast.

So I kind of listened over the next few days, and I liked it, but it wasn't, I mean, it didn't change my life at that point. Then I found out about the book, and I'm a huge book nerd. So we got the book, and that is when we became the card-carrying member of the Dave Ramsey cult. Oh, my gosh. Wow. Yep. I, my gosh. Wow. Yep.

I'm so honored. Wow. I didn't know we had cards. It took a book. This is good. Yeah, I need one of those. We need cards. Cards, T-shirts.

Cards, T-shirts. All the merch. It goes with the thing. Way to go, kiddo. I'm proud of you. Wow. So they don't teach this in finance and accounting, this idea of getting out of debt. I wasn't taught when I got my finance degree.

You weren't taught when you got your accounting degree. I did not. But you sat for and passed your CPA? I did. It took a while when I got my finance degree. You weren't taught when you got your accounting degree. I did not. But you sat for and passed your CPA? I did. It took a while, but we got through it. Woo-hoo! Good for you. Obviously a sharp cookie.

Well done. Good for you. So big job landed and all that, and that's how you go from 14 to 65. So actually, I had trouble getting a job at first, and I finally managed to get one. So COVID hit in 2020, and the little part-time job dropped off, and I picked up to get one. So COVID hit in 2020 and the little part-time job dropped off and I picked up a consulting job. And then while I was doing the consulting job, I realized I wasn't really happy

at my position that I had. So I went to a new position, but they couldn't find a replacement for me. So I stayed on the old position. So I had three jobs and that's what got me up to the 65. Oh, okay. Wow.

Cool. What are you doing today? Now I'm a staff accountant for a local health care clinic, and I just have one of the part-time jobs now. Good for you. Good for you. Well done. Well done. Proud of you.

Thank you. Good work. So the podcast led to the book and led you to go, I'm going to do this. Yes. And the good news is that accountants know systems, and when you see a system, you just plug into the system. It really is just math once you get into it. And behavior, which clearly you did some different things. Yes.

What was the hardest part of this process for you? Oh, man. So being an accountant, like seeing all the money that I was wasting on not putting it into retirement just made me cry a little inside. And then the worst part for me was I'm kind of an emotional shopper. So, like, if you're having a bad day, you go out and find something cool. And when you're working, like, three jobs, you're studying for the CPA, which is almost another part-time job, it's a lot of rough days. So, I would, like, go online, you know, find something, put it in the cart, like Rachel says, add to cart.

And I would get as far as the checkout and see the total and just a tear would roll down my cheek. A single tear. Because I closed the browser window. Did not hit submit. Wow. And they sent you an email that said, you left items in your cart. We miss you. Come back.

Here's a coupon. Come on. Wow. We thought we had you hooked. You caught off the hook. But it was all worth it. Yes, definitely. Wow.

All right. So who were your biggest cheerleaders? My parents were pretty happy that I was doing it, especially since one of them was a parent plus loan. So they were happy to see that go out the window. My coworker Courtney, she's actually on Baby Step 2 as well. So she was always down for a good day of conversation. And really the rest of it was the Baby Steps Facebook community is insanely amazing.

Every time I paid off a loan, I would go on there you know five left four left three left and every single time i would get hundreds of comments from people that didn't even know me and they would say you're doing so great come on you're gonna make it we're so proud of you and for me because i'm single that was everything it really helped push me through when i was having rough times yeah the baby steps community is powerful it really is and they do a great job of encouraging and accountability if you step outside the line they will tell you in there i'm just telling you they're pretty hardcore they're not scared to share their opinion they're card carrying yes

that's what they are their meme game is pretty good too do what now their meme game is pretty good too okay all right yeah we'll send them to you d Dave. Okay. We'll fill you in. I heard this had happened. Dave stays off of Facebook. I do now, but... You can be sure I'm off of Facebook. But I do love that group. It really is incredible to see all the encouragement and support. Having people around you, especially for single people out there, it can feel lonely doing this plan.

And I love that you got connected and you made those moves to have those people around you. We're so proud of you. Yeah, we're proud of you. You're what a sharp sharp young woman very very well done well we got a copy of baby steps millionaires for you how ordinary people built extraordinary wealth and how you can too that's your next chapter in your story the number two job in the millionaire survey of people that become millionaires? Accountants. So she's destined. This is where she's going. Very well, yeah. And she figured that out, too.

I'm not paying other people interest. This is the deal. And a copy of Total Money Makeover, the book that helped you, we'll give you another copy. You can give it away and stir up some kind of a ruckus the way you're going to do with that T-shirt of yours. So good for you. So proud of you.

Well done. Very, very well done. All right, it's abby champagne illinois 69 000 paid off in 35 months making 14 to 65 count it down let's hear a debt-free scream three two one i'm debt-free that is how it's done i love it absolutely fabulous renee is in knoxville hey renee welcome to the ramsey show hi dave how are you better than i deserve. What's up? I sold the house last year, and I still had to pay back some of the mortgage. So I got probably about a third of it back from equity, and I wanted to know what the best way to invest for, like, a short term.

Right now I have it in a 15-month CD because I play it safe. Okay. What are you going to use it for? I'm not sure. Maybe another home in the future. I'm going on 54, and it's not a lot of money, but I don't want to. How much money is it? I don't want to play it somewhere safe.

I really don't want to say. I mean, it's not a lot, but. Nobody knows where you are, darling. It's okay. You're in freaking Knoxville. I mean mean it's not a lot but nobody knows where you are darling it's okay you're in freaking knoxville i mean it's not 10 grand or 100 grand that's 100 good for you okay that's they're not going to come look you up for 100 don't worry yeah you say 10 million somebody might come find you but all right so a hundred thousand dollars and you're you are you going to buy a house in the next three years, you think? Possibly. I'd leave it in the CD then.

Three to five years. I'd just leave it in that CD. It's not making anything, but you're not going to lose anything. And I don't want you not sleeping for the next three years. And I've got a feeling if I put you in a mutual fund, you're going to not sleep because you're going to worry about everything the news says for the next three years. Yeah, under three years, there's just a lot of risk going on. And so once that CD, the 15 months over, I might move it into something more liquid, like a high-yield savings account.

You might get a half a percent. Woo-hoo. But that's not the point. We want to protect this money instead of letting it, you know, fall up and down on the market while you lose sleep over it. Yeah, you're not making anything. You're just parking it safely. Matter of fact, you're going backwards because inflation's eating you up.

But you're doing it for a short period of time. No big deal. It's just a parking lot. That's all it safely. Matter of fact, you're going backwards because inflation's eating you up. But you're doing it for a short period of time. No big deal. It's just a parking lot. That's all it is. You're just not having to pay for parking. That's it. Free parking. I like that.

That's a good way to put it. This is the Ramsey Show. Thank you. George Campbell Ramsey personality is my co-host today this is the Ramsey show talking about your life glad you're here David's with us in Atlanta hi David how are you hey Dave thank you guys so much for taking my call sure what's up hey so um I'm 34 years old um I'm married I have five kids. And we're kind of in a little bit of a tough spot right now. Okay, so last year we purchased a house. It was $312,000.

We owe $300, have a house right now that is, we have a rental property that is completely paid off. What's it worth? That house right now, it's going for about $225,000. The rental would sell for $225,000? Yes, sir. Okay. Okay. The issue is that right now we're in about $46,000 in credit card debt.

Mm-hmm. And we're just, you know, my wife and I were new to the baby steps, and we're to a point where, you know, wife and i were new to the baby steps um and we're to a point where you know like at work assuming burned out you know all the money that would that would come in would immediately leave you know and it just kind of feels like we're leaving like you know we're living paycheck to paycheck because you are that's why it feels that way. Yeah. What's your income, household? So right now, last year it was $85,000. The year before that, we were around $95,000, $92,000. Okay, so about $90,000 do you think you'll do this year?

You know, I would say a safe number, maybe like $75,000 to $80,000. Okay. Are you guys doing a budget? I know you said you're new to the steps. Are you doing a monthly budget on paper and tracking it? Yeah, so we actually just started working on one. So, yes. Yes, we are.

Okay. You're just getting started with the budget, it sounds like. Yes. Because we've got to find out where all this money is going. I mean, you guys make a decent income, and it sounds like there's nothing at the end of the month. And so we've got to figure out where these money leaks are in the budget, if this is going to eating out, if this is going towards online shopping. But we've got to batten down the hatchets here and get rid of this $46,000 in debt. We'll worry about the mortgage later on in the baby steps. Right.

So, you know, I think a lot of it was eating out, you know, we were eating out just the money was just evaporating. Um, and so what my wife was doing was pretty much we were living off of credit cards. And so, you know, now, you know, we find ourselves in a situation where scrambling around, you know, we're tryingambling around. We're trying to pay down the debts from small and large. We're doing the Instacart, Uber. Let me tell you what I think is happening, and it seems pretty looking at it from this side anyway. You're 34 years old. You've got five kids.

You work both work. Y'all are running wide open all the time. Your lives are unbelievably busy it's hectic it's very hectic and in the middle of hectic you do two things one is you become disorganized which never is an efficient use of money and two is you buy a lot of things that are time-saving things eating out as a time saver anything you can do to because you're tired you're exhausted you're frenetic you're going crazy the kids are screaming because you got little kids you haven't got five teenagers your house your house is wild yeah and you know in the

middle of all of that um you're just trying to survive. And so you're not doing anything where you're telling things what to do. You're reactive instead of proactive on everything. Yeah, pretty much. Yeah. So what's going to happen is when you go through Financial Peace University and you learn to become proactive, and doing the budget is a step of being proactive, when you put every dollar on paper, you and your wife, put those kids to bed,

turn off the stupid television, book a night where you say, we're going to spend two hours on this first budget because the first budget is really hard. And you're going to put it in the EveryDollar app so both of you can track it. And I'm going to give you a year to Ramsey Plus so you can go through financial peace university and run the every dollar premium version of the budgeting app okay now when you start making when you start making this money behave you're getting ahead of it instead of behind it then when you're tired and you get ready to buy something you have to look at the budget and see if you have the money right you. You're going to get a raise. It's going to feel like you got a raise when you get on a budget.

Now, so here's my question. You know, being so I'm 30, you know, 34 years old, we have nothing in savings. I know. Absolutely nothing in savings. The only equity we have is, well, so the house that we just purchased it's already gained some equity about forty thousand dollars yeah and then the house that's paid off we have a you know another 225 on a conservative side so my question is would you guys sell that property i'm not trying to fix the symptom i'm trying to fix the problem okay Okay. The credit card debt is a symptom of you being out of control and disorganized.

Well, let me tell you, I'm absolutely done with that. I cut up all my credit cards. There's no way in the world I'm going back to that. So what I would tell you to do is let's get on this budget, and you two get in this class and the two of you get a calm money rhythm as a couple where you're behaving for about 60 to 90 days before you make a real estate decision okay let's start beating on these credit cards using the debt snowball to begin to pay them down you're not going to make a huge progress but about 90 days from now i'm going to sell the rental but i don't want you to do it right now because right now you're scrambling trying to find to sell the rental. But I don't want you to do it right now,

because right now you're scrambling trying to find a way to fix this, and I don't want you to fix this because the this is you. Right. We've got to fix you. We've got to get you guys in a rhythm and get you guys in a behavior. The rental property then can be used to clean up the credit cards when we know they're not going to grow back, because now we're on a new system. We have a new way of doing things, a new life when it comes to money a new set of principles that we

operate by more than is just i'm done with this i'm done with us it's a good place to start but that's not a principle that will drive you for 10 years okay so now then you sell the rental then you pay off the credit cards and and then we pay off your mortgage. Yeah, okay. So you're saying go through Financial Peace University, then decide if we're going to go ahead and sell the rental property. Yes, I think you are going to sell it, but I wouldn't until you've done this. Because you're going to be selling it for a different emotional reason than you are today. You've been flailing around so long that right now sale selling the rental property is flailing but when it's purposeful and intentional and as a part of an overall strategy

90 days from now it's a whole different way to sell it in a whole different place in your psyche that you're sitting when you're making that decision you're a smart guy david uh you just got you just got a lot of irons in the fire. Yeah. I mean, you're juggling flaming swords, dude. And what we're saying is we want to see behavior change so that you have long-lasting financial success. And right now, selling is just a shortcut, and you could be back in the same rhythms that you were beforehand. And so most people doing this plan, David, they'll be out of debt in 18 to 24 months. And you guys absolutely can do that just based on the numbers without even selling this rental property. And so that's what I want to see is some gazelle intensity, and obviously you've got five kids.

Man, your life is crazy, but we've got to find some margin, shave some expenses, bring in some more income, and get creative and get this thing out of your life and never look back. Yeah, and then the burnout will start to go away because you're burnt out because you're a rat in a wheel. You don't feel traction. Once you start seeing some traction from your work the work takes on more meaning and but you have to say have a sense of we're going somewhere with this not like we're just spinning out yeah and that's where you're headed dude you're going to do fine six months from now if you'll do the stuff we're teaching you your life is going to be completely different your attitude your heart rate when you're talking

about this is going to change. The tightness across the top of your shoulders is going to release. All of this is going to happen. That's why we call it financial peace. Two words that don't go together like Fauci math. And so, you know, check it out. Ramseysolutions.com. And you can plug into Financial Peace University.

We're going to plug you in, though. You hold on. We're going to sign you up for a year's worth and get you going. Good stuff. Like my new joke, George? I like that. It's a good joke. You've improved.

I'm moving along. It's a little nicer than it used to be back during COVID. I was more nasty during COVID. Now it's soft. Now it's just funny. This is The Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register.

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