The Ramsey Show - App - Stop Trying To Borrow Your Way Into Freedom

Episode Date: September 25, 2025

🤔 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Think you’re good with money? Take our Money in America quiz!⁠⁠⁠⁠⁠⁠⁠ Dave Ramsey and Rachel Cruze answer your questions and discuss: "Does it make sense to have a business credit card to get cash back on big purchases?" "We bought too much house, how do we balance paying this down vs. investing?" "I'm 21 and still live at home with my parents. Should I sell my car so I can afford to move out?" "How do my fiancé and I combine finances when I have way more saved than he does?" "We have $235,000 in student loan debt and have a baby on the way. How do we get on the same page to tackle this debt?" "Why don't children have an obligation to care for parents financially?" "My wife wants to upgrade the house but I would rather pay down the mortgage. Which idea is better?" "Should I pull from retirement to purchase a second property?" “Can I afford to buy a Harley Davidson?” “What should we do about our daughter who refuses to pay parent PLUS loans?” "I made a dumb decision with my house. Should I file bankruptcy?" Next Steps: ✔️⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Help us make the show better. Please take this short survey.⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📞 Have a question for the show? Call 888-825-5225 weekdays from 2–5 p.m. ET or⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠send us an email⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. 📱 ⁠⁠Get episodes early in the free Ramsey Network app! ⁠⁠ 📈⁠⁠⁠⁠⁠⁠⁠⁠ ⁠Are you on track with the Baby Steps? Get a free personalized plan.⁠⁠⁠⁠⁠⁠⁠⁠⁠ ☮️ ⁠Lead a Financial Peace University class.⁠ 💵 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Start your free budget today. Download the EveryDollar app!⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🧮 ⁠⁠Set and actually reach your goals with the NEW 2026 Ramsey Goal Planner! Hurry—they sell out every year!⁠⁠ Connect With Our Sponsors: Stop paying more and start shopping smarter at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ALDI⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get 10% off your first month of⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ BetterHelp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Boost Mobile⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ to switch today! Learn more about⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Christian Healthcare Ministries⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get started today with⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Churchill Mortgage⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get 20% off when you join ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠DeleteMe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Go to⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ FAIRWINDS Credit Union⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for an exclusive account bundle! Find top health insurance plans at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Health Trust Financial⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Use code RAMSEY to save 20% at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Mama Bear Legal Forms⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ NetSuite⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ today to learn more. For more information, go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠SimpliSafe⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Use promo code RAMSEY for 18% off at ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Nokbox⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. Get started with ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠YRefy⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ or call 844-2-RAMSEY. Visit⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Zander Insurance⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ for your free instant quote today!  Explore more from Ramsey Network: 💸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Ramsey Show Highlights⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🧠 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Dr. John Delony Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🍸 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Smart Money Happy Hour⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💡 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠The Rachel Cruze Show⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 💰 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠George Kamel⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 🪑 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Front Row Seat with Ken Coleman⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 📈 ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠EntreLeadership⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Ramsey Solutions Privacy Policy⁠⁠⁠

Normal is broke and common sense is weird. So we're here to help you transform your life from the Ramsey Network and the Fair Winds Credit Union studio. This is the Ramsey show. Rachel Cruz, Ramsey personality, number one bestselling author and my daughter is my co-host today. Open phones at AAA 825-5-2-2-25. Cooper is in Dallas, or Fort Worth, Texas. Hey, Cooper, how are you? Hey, Dave, how are you doing? Better than I deserve. What's up? Hey, so I had a question. We've been getting into commercial landscaping and contracting, you know, construction kind of stuff. Good. And I've just had this question. We don't like that at all. Like, we're totally, we just

on yourself, usually we're tracking with you on no debt, but I've been wondering about if I'm going to be spending hundreds of thousands in material, does it make sense to get some kind of card that gives me cash back, like 2% cash back or something like that, or is that not a good idea? Okay, so what's your gross revenue on your company? This year, it could be over a million a little bit. Good. What would be your profit on a million dollars?

Uh, somewhere around 25%, I think. So, $250,000. Something like that. Yeah, good for you. Way to go, man. Thank you. Thanks. Yeah, loads me.

So what I want you to do is to concentrate on that business, because that business actually makes money. The business you called me about, if you spend $100,000 and you get 2% back, that's $2,000. Mm-hmm. Yeah. It's irrelevant. when you're running a business

is making a quarter of a million a year. You should be working on the quarter million dollar business, not the credit card business. You're taking your eye off the ball. Don't take your eye off the ball. Yeah. People get distracted. You're trying to make the bank money instead of yourself.

Right. You don't beat Visa. You stay away from them. You can beat your competitor, and you can take care of your customer. But my point is, While you're using up this space in your brain, your brain is so powerful. It made $250,000 last year, and you're wasting this powerful brain on $2,000.

Yeah. Whoopty, doopty, don't do it. Yeah. And Cooper, I always wonder, because at Ramsey, I know it's a shock, Cooper, but we don't have credit cards inside the company. We use cash, and we used to even bring literally envelopes of cash. like if we were on the road traveling for events and stuff. So we in our company, you know, obviously it is so cash-based. And I do wonder the psychology of a consumer or not a business,

but the consumer shows, study shows you do end up spending more with a credit card because there's an emotional detachment to your money. It's just that that is what it is. And I wonder in the business, it's going to, that principle would roll over into a business side where you may not even realize it, but you're thinking, oh, yeah, well, we can just get that. I'll buy that extra, too.

I'm getting a load of stuff, but I'm going to go ahead and buy this extra piece of equipment. Because I'm getting 2% back. Because I'm getting 2% back. You could happen, you know. I don't have any data to prove it. If we spend, you know, to get like 10 grand back, I was doing some of the numbers of what we have. You don't get 10 grand back. Well, that's a truck.

I agree to, yeah. Yeah. No, I really, I would spend my time and my brain power doing what you're doing instead of trying to trick Visa and win against them. 100% of the time, they have a plan to win. And if you think you're beating them, you know, I'll give you another example, guys out there, because this always comes up, Rachel, I get airline miles. That is so humorous. 78% of the airline miles are never redeemed.

Wow. That made sure they're useless. That's eight out of ten airline miles do not ever. see the light of day. And if you did want to actually redeem your airline miles, you have to burn so many of your brain calories and Jupiter has to be aligned with Mars in the age of Aquarius and you happen to get the perfect person on the phone to actually show up. They have made it easier. So to that point, it used to be more, I think, like that, 100%. But the, but some of them, yes, have protection. Easier than impossible, but not easy.

I can call and book an airline, boom, just like that. Well, you don't call. You do it online. You do it on the app and you just change the number. But the point is though,

that's the thing is that if the airline ticket, if you need a free airline ticket via your credit card points, if you can't go on a vacation because of an airline ticket, you shouldn't be going on vacation. So the idea that you're, you know, living this system in order to do something, if you couldn't afford to do it in the first place,

you don't need to be doing it overall. So, um, but I'm, it's always humorous to me because, I've never interviewed a millionaire that said, Dave, you know, the way we got here was airline miles. That's how it happened. That airline miles, that was our financial breakthrough. Yeah.

And that's just horse crap. Well, it's... I mean, it's just bull. I know. And I think in an overarching mindset to so many people we've talked to who have said, you know, we played the credit card game and then we chose not to, we're done, is there is a level of peace when you just live in the present, right? You go and last night, shopped online and you pay for it. you're done like it's it's done like when you live in the present there's not something out in the

future that you're looking for and so there is a true from a mathematical standpoint and an advantage there and an emotional where you're like I'm not at all even thinking about a bill because it's done it's not taking up my brain power on stupid stuff seriously there's a there's a power there's a piece to that you're right but there's also a that brain power can be used to make you way more money than then then you would have gotten a free biscuit with I mean it's It's just, it's, the numbers are ludicrously low, and the percentage of people that actually cash it in is almost zero. It's the biggest screw job. And yet, everybody walks around and acts like they're sophisticated.

Well, and not to mention the fees. And I just saw, it's like a platinum card or something, has up their annual fees. So the amount of money you have to even spend to have the card, you have to consider that too. What was the one you saw, do you remember? I know. I'm trying to think it was a platinum. It may have been a platinum. It was something because it had to do with a card.

lounge in an airport because there was a whole article and then these people were joking about the lounge because the lounge was kind of a joke some lounges i think are nice but this one was like a it's like ritz crackers and she you know and they were like oh my gosh i'm spending this much to keep a credit card to get me in a crappy lounge when i do like the whole thing it's just silly it's like this i spent a thousand dollar annual fee or a five hundred dollar annual fee to get four dollars and they're upping those annual fees i mean this one says amex just up to it from 695 to 8.95 yearly. Maybe that's what I saw. The MX Platinum

card was 695 and now it's 895 yearly. Well, Amex is just double dumb, but yeah. So, yeah, $8.95, $895 for the opportunity to be your customer and spend my money let you, good God. Where you can go to fair wins and they're the nicest people

you know, the credit union, you deal with them and you're good and you're good. So it is. It's a game people continue to try to play. Yeah, you can get the debt is normal, be weird, debit card. I know. We just got ours two days ago. Winston, I did it. And I went on, talk about an easy process. Fair wins. Thank you. Their app. I went on and activated the card. You call. You do your pen and you're good to go. All completely free. Yes. Not $8.95.

And yeah. For a platinum titanium double back flip card. Yeah, this is just a regular old debit card and it just won't let you spend money unless you have it and stuff like that. Wow. Way to go, Fair wins. I do like that we have a Ramsey debit card that says debt is normal, be weird. Every time you pull it out of your pocket, you have to look at that and go, debt is normal, be weird, debt is normal, be weird. It's like this reinforcing message. I love it. Big seller abrasion. They're all around Ramsey today. 1100 of us are jumping up and down excited. Why? Because it's official. The all-new, ever. Every dollar is live, Rachel.

Yep, it's here. It's something that we've been working on as a team for a while. It's been a big goal to get every dollar, not just as a budgeting app, but for your entire financial picture because we want to walk with people through not only all the baby steps, but even looking at everything down to your insurance. I mean, all of it. Like, it is so impressive what's been accomplished in the fact that it's today's the day. So fun.

What it amounts to is that there's two things that we have done that have run. that have revolutionized people's lives in the area of money if they go do them. Okay, one is the Ramsey plan overall and all that that means, baby steps and all the things around it, and then having the place to apply those principles in a thing called a budget. And that's always been the case. If you do the budget and you do the Ramsey plan and use that to implement your budget, you always will get out of debt, bill wealth, be in a place to be generous. It always works.

and this is the first time we've ever had it all woven in to a digital thing together. And so it's the best way to do the Ramsey plan while doing your budget is the new every dollar app. So we have, like Rachel said, we spend a bazillion dollars and man hours and brain calories in this place getting this thing ready and it's live. We're really excited. The baby is here. So watch the premiere now on our YouTube channel and see what it's all about. You can hear from everyday people who are using every dollar. They're finding thousands of dollars in margin.

Think about what you can do with thousands of dollars to get out of debt so that you could build wealth. It's pretty cool. If you do one thing for yourself today, let this be it. Watch the premiere of the new, all new, every dollar. It's here. And Rachel's prominently featured in that along with Jade and George and so forth. This could be the thing that changes everything for you. because this is the one-two punch that for 30-something years we've been doing at Ramsey.

The Ramsey plan, the details of this, boom. And it's an app on your phone. And now you can hold it in your hand and do the whole thing. Your phone goes everywhere with you, which means your financial plan does too, which is great. Yeah, it's pretty stinking incredible. Yeah, you're exactly right. It's convenient. Oh, and by the way, those of you that have been wise enough to combine everything with your spouse, boom.

It's all right there in both of your hands. You know what the other one's doing. knows what everybody's doing we're on the same page we're pulling together boom boom boom it's so powerful you guys so check it out the all new every dollar is live watch the premiere of the all new every dollar it's right there on youtube on our youtube channel and you can find thousands of dollars of margin andrew is in washington hi andrew how are you oh better than i deserve how are you doing dave better than i deserve how can we help um i just recently found out about you guys and um i love your program and i'm trying to work it with

gazelle intensity um so we me and my wife recently bought a house um but it's about 40 percent of our income um trying to build my emergency fund right now we just got all of our credit cards paid off and the car paid off um good for you guys i thank you um yeah it's exciting it's exciting to actually have cash again. So I guess my question is, after we save the emergency fund, because this mortgage is so much of our income, would it benefit me more? And we got a 30-year loan to try and pay this off early so that we have more to put towards a 401k or just go to 15% into the 401k and the mortgage will take as long as it takes.

I've seen just hardly anyone prosper when their house payments 40% of their take-home pay. So I don't really know how to answer you other than to give you a really hard answer, and that's sell your stupid house because it's way too big and too expensive. Unless your income is going to go up dramatically in the next 36 months, this is going to stunt your financial growth. because you're mathematically what we all in the business in the financial planning world call house poor you feel it in the stress when you're trying to do the budget don't you yeah no definitely yeah so what's your household income sir it's about 110 um what do you guys do for a little

hits i'm sorry go ahead sorry um i know exactly what hits our account more than i know the the taxes, but we get 8,248 every month that hits the account. Okay. And what do you guys do for a living? So we work in organic gardening. So we work for a garden supply store. And we actually, in order to take this job, we had to move to Washington. And originally, part of the job was that I didn't have rent.

We lived on site. there was a property where the business was run and we got to live in a two-bedroom house for free on that property but then my boss sold the property last year or well I guess decided to sell last year he's just now sold and then so we had to move but we were having trouble finding rental property so you got a pay cut you moved out from out of state to take the job and then he cut your pay yeah well I mean he gave me a 50% raise to try and as like a housing allowance so he gave me I was making $20 an hour now I make $30 an hour so it felt like a substantial pay bump what does your wife do

she does marketing and customer service for the same company yeah because she makes a lot more than you then um Not at the moment. Darling, $30 an hour is not $110,000 a year. So I make, I think, 60 and she makes 50. I think she makes 25 and I make $30 an hour. That's not $110,000 a year. Okay, when we were going over the raises with the accountant, just go multiply that times 40 hours.

It doesn't come out to 110. Well, they're bringing home close to 90, and after tax. No, he says 8,300. Yeah, yeah. So, which is $100,000 a year. And that's after tax. Net, yeah. $30 is gross.

So, pre-tax is what? $30 is gross. So, no, he's not even close. So anyway, I don't care how you got here as much as I care how you get out of it. And you learn from how you got here. You felt like you were forced to go do something that, buy something you couldn't afford and you went and did it instead of finding an alternative. And I, unless you are going to see your way to substantial raises in a very short period of

time, I can't recommend you keep this house because I love you and I want what's good for you. I think you bought a house you can't afford and you're going to, you're going to be strapped by this house and it owns you. You don't own it. And you don't have the money to get ahead. So you guys got to, you need to sit down and do a little better job with your math because I think it's off and I know it's off one of these numbers is wrong in other words and then figure out okay you know can what what can we do with our careers that allow us

to stay in this house by causing our income to go up pretty dramatically so that the house payment becomes a smaller percentage of our take-home pay but if you have a 30-year mortgage and your payment is I don't even know that's barely and it's choosing I mean Because that, I don't know what you would say to this, but I'm like, you're either going to choose to change careers in order to keep a house. But if you guys love what you do, then you've got to lose the house. Like, you know what I mean? Something's got to go. Yeah, something's got to.

Or if this career is, I don't know your arrangement, but so far it's not been good with this employer. I mean, so far it went sideways on you. But because I'm not sure $10 and $10 probably does offset. an hour, probably did offset the rent value of that two-bedroom house. But then you couldn't find a rental to seat you, so you went and bought a house or couldn't afford. Well, it's the urgency that caused probably a poor decision because he said we couldn't find somewhere to rent and then you kind of get desperate and then you pull the trigger on something at your seat. Well, then you start saying things like, there's no houses. Don't ever say that.

There's no rentals. There's no price. You cannot live here for that. Yeah. Yeah, you can. You just didn't like that neighborhood. So anyway, honey, I'm afraid you can't afford the house, but if you can't get your income up, I'm going to tell you because I love you to sell the house. Because I think that house is not worth you limping for the next decade financially. Philip is in North Carolina.

Hey, Philip, how are you? Good, Dave. How are you? Better than I deserve. What's up? Good. Thank you so much for taking my call. This might be one of the coolest things I've ever got to do. Well, me too. How can I know? Thank you. I had a question for you on some advice on a financial decision that I'm kind of considering and I just didn't know what the best way to go about it was. So I'm 21 years old. I live with my parents still. Have a pretty good job. and I currently drive a pretty nice car that I absolutely love, but absolutely hate paying for.

And my question is whether or not I should go ahead and sell my car and buy something that's kind of like a little rinky dink car and get out of debt tomorrow, or if I should wait a little bit and pay it off while I still live at home. and if I did that, this would kind of delay me moving out for a little while, but, of course, I get to keep the car that I really do love. So just kind of wondering if you were in my shoes with a car you love, but a car you hate paying for and you want to move out or want to have the flexibility to move out, would you wait and pay it off and delay moving out,

or would you go ahead and get out of debt as soon as possible and then drive something that's kind of crappy? Really good analysis. Well done. Good job. How old are you? Thank you. I am 21. What do you make? I make about $60,000 a year, and then I also have some side work that I do that brings in about $5,000 a year, extra.

Okay. And what do you owe on your car? I have just over $20,000 on the loan. What kind of car is it? It is a 2023 bright blue Dodge Charter. Oh, that's sweet. Oh, Blame. I love it.

Yeah, I got it right after I started working. full time. I'm in marketing in sales and my car broke down two weeks like two weeks after I started the job and so I heavily upgraded and you know like I said I kind of if I could do it back over again I'm not sure if I would do it but yeah I was

completely irresponsible but it's an awesome car. Yeah. Philip have you Kelly Blue Book did it all? Do you know what it's worth? Yeah the it's worth now only like 22, 23,000 but I have a few offers on some private site for about what I paid for it, which is about $28,000.

Okay. So you can make, okay. And make money. Yeah. So you could go and then go buy an $8,000 car and then move out and live your life without a car payment. Okay. So I'm doing that.

But I'm also not like dying to move out. Like I don't want to do it right now. So that's kind of the thing is I just kind of want like that flexibility. You know what I mean? So I just know I could pay it off by late next year, but I don't want to, I don't want to tie myself down. And other than I... Wait a minute.

You're making $65,000 a year. Where's all your money going? Well, I mean, I'm saving a lot of it. Oh, good. How much is in savings? I have just over, I think, in total, closer to about $14,000, $15,000. Okay. And the reason I'm asking this is because I had kind of thought, like, you know,

I'll pay it off at some point. I can't just play the game. But then I rediscovered your content online, and I realized I don't have peace, and your thing is called financial peace. So I don't really know what to do. All right. So here's the thing. You've apparently just discovered it.

It says one of the things we teach is called the baby steps, and it's the process that you work through from where you are today, ready, set go, to get out of debt so that you have your freed up income to build wealth with, And in your case, have a life outside your mama's base. Right. Right. And so Bill wealth and Bill generosity. And, of course, baby step one is $1,000, anything above that that's not in retirement, goes towards the debt.

And baby step two is pay off all your debt, except your house, working them off smallest to largest. You've probably heard us say that, hadn't you? Oh, yes, definitely. So that plan would dictate that you take 13 of the 14 and put it on the 20 today. That would leave you seven. And I want you debt-free in two months. you make you make $60,000 a year and you have no overhead. Quit going out every night.

Oh, there's that. Okay, so you can do that, Philip, but let me throw this out there. You're 21. You've got $14,000 in savings. You could sell this car tomorrow, go buy an $8,000 car, still have $14,000 in savings. Go rent an apartment, live your life. You're on baby step three. then you start investing.

I'm like, I'm done with the car. You could pay it off 100%, 100% if you choose to. But also that drains all of your savings for a charger. Sorry you and Dave have like a love affair over chargers, but I'm like, no, go get like a great Honda Civic and you're fine. We're having a Charger bromance. I know, I know. And I'm like, no, no, just go get a Honda Civic and live your best life, Philip.

Don't let this car be the thing that like drains your savings. I don't know. You can't. That is the baby steps. That would not be wrong. Yeah, it would not be wrong. It would not be wrong, but the rule we use on cars is, can you pay them off and all your debt in under two years? I know.

Otherwise, the car has to be sold. And is the car less than half your annual income? It is. And do you love the car? All of it, yes. You do. So you meet all the guidelines. You do.

You'll be fine. But also, plan B, crazy plan would be sell it and you can start investing, like in the next couple of months with retirement. Like you could snowball your future so fast, Philip. And then you can save up and go buy another car. I don't know. I think the car is a, I think it's a great picture of where does Philip want to start his 21-year-old life and beyond. If I were in your shoes, Dave's keeping the car. In January, either way, I know, I would do either one.

I don't care. I'm with you. There's nothing wrong with your suggestion. If I were in his sake, I'm going to disagree with your suggestion at all. It's 100% okay. It's also 100% okay. But by January, you need to be in your own apartment and be dead free. if you're not willing to do that you need to sell the car

okay if the only way to do that sell the car and it's not the only way do that mathematically by the way if you do what I told you do you can be debt free have the car and be in an apartment by January because when you get out of the house different gears are going to start hitting in your head and you're going to go to a different place in your young man development

and you're going to start to see life different you're going to start to make different money choices career choices, everything. I predict that five years later, your income will be higher if you do that, what I just told you to do. Okay. Because you're out there on your own,

and you have to buy your own milk. Right. It makes a difference. It just does. And I watched that with our kids. Rachel left college straight into marriage, so she never passed back through, but her sister passed back through for a few months,

and then went out on her own, and I watched her change as she went out on her own. I mean, it really, yeah, it forces you to be 100% responsible for your whole life, you know. I mean, it does. It's a good thing. Yeah, the lights get cut off if you don't pay the bill, you know, that kind of stuff. So I'm going to encourage you to get out of the house, not because you've got a bad situation or toxic situation, but because it's time to grow up, move on. And I'm going to encourage you to get the car paid off one way or the other, either by selling

it and doing Rachel's plan or by working another plan that is within the guidelines, but not as smart mathematically, but it's also okay, you love the car. We've all established that. So, by the way, if the car was $35,000, we both would be telling you to sell it because it'd be more than half your annual income, okay? In value, even if it was paid for.

Because, folks, if you, everything that has wheels and has a motor goes down in value. And if you have more than half your annual income, invested in things that are going down in value, you don't have to scratch your head and wonder why you're broke. It's in your driveway. It's the bass boat. It's the C-Doo. It's the car. The campers. It's the camper. It's the whatever. If it's got wheels and or a motor, it's going down in value, period. And when you have too much of your mathematical juice tied up in things going the wrong way, it's almost impossible to pull it off. That's what Rachel's suggestion is coming from.

And the fact that we get calls, I'd say nine out of ten calls that we get on cars, they owe more. Than it's worth. The fact that he can make $8,000 on it? I'm like, do it. Well, make $8,000 from what he owes, but not what he originally bought it for. He actually walks away from the table with money, which is very unusual. Yeah, so I'm like, I take advantage of that. And then you can go get a, it is, a blue charger?

Yeah, it's a pretty sweet car. Oh, I'm getting nods from the dudes in the booth. The guys in the booth are all going, eh. And you know what? The booth dudes. Majority of women, Phillip, I have no idea. Yeah. We don't know.

And if she did go out with you because of your car, you don't want her. And then you got to bring her back home. So get out of your parents' house. If you like what you hear, help us out of your parents' house. If you like what you hear, help us out by sharing the show. Click the share button or click cut a link out and send it to a friend or just tell them that we're here we appreciate that those five-star reviews are very helpful thank you for that because it moves the show and the algorithm out to the front when people are

getting a suggestion you know on their podcast or their YouTube or whatever it is yeah they get it all there so and we're on all the platforms so wherever you're listening on or watching on just tell people we're here thank you for doing that you can watch on YouTube and see that Dave and I are matching today did you see that I saw us and some buttons I know and the guys in the booth all have on the new every dollar t-shirts. Oh, they do. So they all look like they... They all are matching, too.

How great. It came out of a 1950s gym class with those white shirts, but, yeah, white t-shirts. Very good. They look great. They're snazzy looking. And Joe has his tucked in, so I'm just saying... I'm just saying it happens. We appreciate that, Joe.

Hey, Susan is with us in Maryland. Hey, Susan, how are you? Hi, Dave. I'm well, how are you? Better than I deserve. What's up? Thanks for taking my... call. I have a question. So I recently got engaged and I am trying to figure out with my fiance, how should we approach merging our finances after we get married when I have a

pretty high net worth and he has really no future investments but has a lump sum of cash. okay and how much is your net worth about two million okay way to go how old are you 53 okay and and what is his net worth do you think uh 250 000 oh not bad okay and how old is he 55 and what does he make about six thousand dollars a month and what do you make? I just retired, but I made almost 200,000 a year. So what are you going to do in retirement at the young age of 55? Sure. I have not figured that out yet. It is very recent that I just retired. Okay. You're not married yet. How are you buying groceries? Um, uh, how are we buying groceries? No, how are you buying groceries? You have money saved.

I mean, she has a $2 million net worth. Yeah, I know. Oh, oh, how am I? I have money in, I have a pension. I have a pension coming in. Oh, okay. Great, great. What is the $2 million invested in?

So the $2 million is my $401K is about $1.1. I have a Roth IRA. I have money market. I have a savings account. So all that in total is about 1.6, and then the value or the net value of my home is about 400,000. Okay, cool. On a home or a 401k account, when you get married, there's nothing to do. You can't add someone to your 401k account.

You could add someone to a deed, but it's probably not necessary. Then what you've got to determine is, is this a large enough difference that you want to make sure you're covered in the event of a divorce? Okay. And if you do, obviously, there's two things you can do on that. One is pre-nup, and two is, and there's a pretty large difference. The only time we ever would say the word pre-nup is if there's a huge difference. the two okay and generally it's not to protect you from each other it's more to protect you to from your weird relatives when you have a pre-nup you just go I can't

help you I got a pre-up so can't open a pizza parlor with her money sorry sorry crazy cousin Eddie you know so and that's the kind of thing that helps it helps a lot with that the other thing it forces you to do is it forces you to talk through this now some states and I do not know the law in Maryland and I'm not a lawyer anyway so you can't trust me on this but some states would your 401k that you came into the marriage with and would protect the real estate that you came into the marriage with and probably the Roth too and the Roth the Roth is definitely protected but I you know and so if you didn't name him the beneficiary in the event of your death or if

you got divorced the 401k would be protected in most states I don't know the law in Maryland you can ask somebody on that to find out and not Google a lawyer okay yeah I'm not sure that We're going to stay here just because, you know, now that I'm not working, I don't need to stay here. He works remotely. I guess my bottom question is he's got, he's got a lump sum that he's not doing anything with. It's 250,000. He's got a lump sum and no debt. But I guess my question is, should we, when we merge everything, should that lump sum be invested and we're kind of just living on our, my pension and his salary. Yes.

I just don't know what to do. We don't know what you do with that. And you sell your house if you leave Maryland and you take that money to buy the house in the next place. Yeah, so we have our own individual houses, but when we get married, we'll merge and we'll move to a different state. Health of living will be less. I think if you sold both houses and used the equity from both houses to buy the next house, then you've got to think about that as well. but um paying cash yeah oh definitely definitely yeah your house is paid for right no i have 400 000 uh left over on a 700 000 oh i thought it was a 400 000 house okay cool

that's you have 300 equity and how much equity does he have uh he just sold his house so he that's where he walked away with the oh the 250 was that okay so you have you have so you have $550 to buy a house in the new state, and that probably will do it. Yeah, Susan, does it worry you at all that he's in his 50s and has no money saved? The only money he has to his name was from his house? Yeah, absolutely. That's a great question. I was worried.

I didn't know about that at first, but after we started getting serious, it made total sense to me. He had his own business, and he just kept on believing in it and pouring money into it, and he liquidated his retirement. to keep the business going and then finally just gave up. So there was some mistakes that he's aware of of why he's in the position he said. Yeah, some of it was post-COVID. Yeah, it feels like you're fairly new to Ramsey.

So let me give you two principles that are in conflict with each other in this discussion that we believe in both of, okay? Principle number one is where I told you earlier. I used to tell people never, if you like your money more than the person, just don't get married. If you got to have a pre-up, you don't need to be married because you like your money more and you like them. And then over the years, the decades of doing what I do, not only here on the air, but sitting in person, I found that where there's a huge differential between like $2 million versus $250 is a huge differential, then it does help the relationship in many cases. And it does help the crazy cousin Eddie's that are out there in the family tree somewhere to have a pre-nup. And so that's principal. number one, and that's standard teaching from this microphone that you would have heard over the last decade to two decades, okay? The second principle that seems to be in conflict with that and kind of causes your

call to happen is we know that couples that combine their finances, combine their earnings, and work together to create a future together, succeed vastly in the quality of their marriage and succeed vastly in their wealth building capability. We've got tons of data on this to prove it. And so encouraging the two of you to combine your pension, his income, to create your future together, 100% have to do that, okay? And 100% whatever money your $2 million makes, if it comes into the checking account, we're going to combine it, and we're going to live our life with it.

Whatever money he makes from whatever, we're going to combine it. And if we're going to both throw in about $200,000 or $300,000 on this house, we're just going to call the house our house and that's it uh the new house in the new place then you know so really work to be unified and combined but if you wanted to protect a few individual items like these 401ks and stuff prior to marriage then the pre-nup would be in order and it's not in conflict with that but it feels like it is and i probably would do that in your case Welcome back to the Ramsey Show in the Fair Wins Credit Union studio, Rachel Cruz, number one bestselling author, Ramsey Personality, host of the Rachel Cruz show, and my daughter is my co-host today. Joe is in Colorado. Hi, Joe. How are you?

Hi, I'm so honored to speak with you guys. You guys are amazing. Well, thank you. How can we help today? Yeah. Okay, my husband and I have been married three years. We're a little overwhelmed. We worked the first two years to pay down $135,000 of debt on his student loans. We don't have any other debt. But we still have $235, and it's growing because we have not been able to pay anything in the last year. We're actually paying for some attorney fees for my daughter.

Her bio dad is now in the picture after eight years. It's a long story. but basically we've been doing that for the last year. I want to get on the same page with my husband, and I feel like he feels, I know he feels very guilty about how he hadn't been paying it. He's a recovering alcoholic, and, you know, he's on the right page now. Both of us are, and we're just, we're expecting a baby, we're going to move, we're just really overwhelmed.

We have no furniture. We've been renting from family. And Joe, y'all got a lot going on. We do have a lot going on. So your current husband is a recovering alcoholic? Correct. And how long has he been to clean? How long has he been sober?

He's been sober eight years. Way to go. Good. And the bio-dab was from eight years ago, right? Correct. I was not married. Making sure I got my... Sometimes I get confused.

Yeah. And what's the degree in? Because it's like a $300,000. Yeah. Who's the lawyer? He is. he's not actually making as much as he could be i think um as soon as we are able to move he'll be able to make more this um location is just completely untenable like they um he's only making

a hundred thousand and i know he could be making a lot more um out and what do you do i'm a graphic designer so uh and i actually make almost as much as he does but i've been in this job for a long time. Okay. And what are, so you're thinking about moving to a more metropolitan area to further his career? Yes. Yes. And when would you be doing that? Um, the babies do in December. We're thinking February or March if he can get his bar transferred to another state. That sounds pretty good. Okay. Yeah, it does sound pretty good, especially because cost of living will be a lot better. Yeah. And the income will go way up. Right. Yeah. What would he be expected to make, Joe? 200, 250?

I don't know. He really has only been working in the last four years. Yeah, I know. But if you're talking about moving in February, he needs to be on the job hunt. Yes, and he is. He's got to transfer his bar. I know, but I mean, so he ought to have a clue what he's going to be making. Well, that's true.

I think he just wants to get through the first step first of getting that transferred and then start with him. I don't want to do all of this and make 105. so I need to know I agree so I need to know so we don't need to worry about transferring the bar if I'm going to make 105 well that's true I mean so we need to know would be half right okay I think you're making assumptions here that we need to ask a question what can a law you make in that city doing the type of law that he's been practicing that he can get a job doing can he make 150 or 250 and we need to know that that's a key part of this story okay yeah but if you're going to come out of that They're making, you know, $150 to $250 somewhere in there, and you make this move. That all sounds wise. It sounds like your job is portable, so you can take it with you to the city, right? Yes. Okay.

So very cool. I like all that. Okay. So then we got a baby, and we got a big old pile of student loans, and we've been a, we've hit a hiccup by an anemic career, his, and we had a hiccup by paying lawyer fees, oddly enough to beat back the bio dad, right? Right. right okay so that's both of those things are behind us starting in February ready set go am I missing something I sure hope so we we might have more attorney

fees this is not it's an ongoing battle yeah yeah we don't have even basic things like um you know furniture to eat on fit on um yeah but that's just stop you make $250,000 you ought to go buy some furniture okay when you make the move I mean you don't need to my don't buy into you move but when you move in February you have a budget yeah look through you ought to be able to handle these attorneys fees and eat and put some basic furniture in now you don't need to spend 200,000 dollars with a decorator doing this house up or something but but yeah go rinse you a place and buy dadgum couch and um then all you know because then you can start to take some of these things that are on your plate off your plate

and if we're down to fighting biodad and sally may now we've defined our fight and we've narrowed our scope okay that that makes great sense and so you would pause the student loans until maybe we're out there yeah for sure you got a baby on the way and you don't have furniture yeah payment on payments but don't put extra on it yeah I wouldn't worry about I wouldn't worry about working your total money makeover baby steps right now to push pause but I would be on a tight budget and pile cash up to make this move we make the move buy a couch settle in have the baby. Life is good. Everybody's home and safe. All the medical bills from the delivery

if there are any out of pocket are covered. All this is done. Boom. Now we're set, ready, set, go. And we have two goals, beat Biodad and Sally Mae. Okay. That makes great sense. And I think the other part of my question, if you have time, my husband feels so guilty about his student loans. I, of course, feel guilty about the whole biodebt situation. I know that we can rally and fight this together. Did you know the student loans were there when you got married? Yes, I did. Why would you feel guilty?

You signed up for the trip. Right. I know I tell him this, but I think he also brings that up whenever I bring up budgeting or money and it always ends in a fight. And I don't know that that's his default per se, but, you know, he kind of clams up. What's the fight about? just that I want to have a budget and I'm probably too aggressive and frugal and he's more we haven't spent any money in the last three years but we're just um I think it's usually

that he just doesn't want to talk about it it's not something he likes to talk about yeah well that needs to change it's part of him growing up here part of his sobriety part of his continued sobriety is good to face the demons and knock him out yep that's like grown man's stuff, grown girl stuff. How could, so I don't know how, I can't be Dave because I'm me, what would you suggest I say, or how should I approach it? Look, we both brought things into this marriage and our vows, and we both knew about them. And our vows said in sickness and in health, for better or for worse.

And we've had, we've pretty much got some of the worst covered, so now we get to lean in on the better. Right. You know, we got some of the, we got some of the worst in the river. your mirror pretty early so now we can lean in on the better and the better is let's tear these student loans up and let's beat the crap out of metaphorically uh biodad yeah and it's not who he is right from an identity standpoint i think so much like our net worth becomes our self-worth and it's like his self-worth he feels so crappy with his decisions but they're the two are separate right

you make stupid decisions with money it's not who you are it's just what you've done yeah i filed bankruptcy and he should and and and and to tap into that part of him and his sobriety and the plan that he worked, I'm sure through AA and different things, like getting to that level of identity of who I am, that I'm not my addiction, I'm not my debt, that's not who I am. But now I need a plan to get out of it to actually see hope on the other side, which is what you're trying to do with the budget and all of it. I think you keep talking about it and pushing it through. And the encouragement, yeah, and if.

And if you need to sit down with a counselor to get some common lingo, there's nothing, no shame in that. Jump in, call the people at better help or something and get some help. Today's question of the day is brought to you by Y-R-R-F-I. If your private student loans are in default, it can feel like nobody will work with you. But Y-R-R-R-F-I was built for this. They'll help you explore a fresh start. Go to Y-R-R-E-F-Y.com slash Ramsey.

That's the letter Y-R-E-F-Y.com slash Ramsey, not available in all states. All right, today's question comes from Dennis in Florida. During a recent show, you told parents that their children are not morally or ethically obligated to take care of the parents. How do you reconcile that with 1 Timothy 5'8? Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever. As a Christian, shouldn't we teach financial responsibility from a stewardship with love and compassion in that perspective? Okay, a question that is not a question, but that is actually a statement, is called passive-aggressive. But I'll answer it anyway, okay?

So you're trying to teach me the Bible. I appreciate that. So to start with, it says your own household and your relatives. Okay, your own household is not your parents. Your household is the children that live under your roof and your spouse. That's your household. Your parents are not your household. Okay?

So who does not provide for their relatives? Now, we would never suggest that you not provide for your relatives food or some basic care as long as there is reasonable behavior involved. But the same writer as First Timothy, which is Paul, also said, those that don't work shouldn't eat. And Jesus said, if you're faithful with the little things, You'll be given more to manage. And Proverbs says, the diligent prosper and, and, and, and, and, and, and. So, scripture, when it comes to this issue, this type of issue, is full of cause and effect. If you sow sparingly, you will reap sparingly.

So if you plant three grains of corn, please don't expect a bumper crop. okay in other words our actions have consequences so in what condition would you need to take care of your parents it would be if they had not done the things that the bible teaches them to do with money and so they have none that would be the condition okay so for for instance there is no moral or ethical obligation for rachel and lincoln to take care of rachel and lincoln to take care of Dave and Sharon, nor will there be a mathematical need for her to take care of us. And by the way, there's not a moral athlete or there's not a mathematical need for me to take care of her in Winston either because they've done a great job with their own life and have been responsible with the cause and

effect world that the Bible outlines and that we all live in. So it is not compassion to say that carte blanche, you should always take care of your parents. That's not compassion at all. Now, so I disagree. That is not a compassion perspective, love or compassion either one. Love has mixed in it truth. And the truth is you should say for retirement so that your children don't have to take care of you. The truth is you should live on less than you make. The truth is you should get up and go to work.

Work. These are all truthful things. Now, if I've got an 80-year-old lady that calls in here, or a guy called, in here and his 80-year-old mom has zero money because they didn't do a good job with their money and dad has died and she's trying to live on Social Security and he says I want to give her a few thousand dollars a month and I've got two million dollars to make sure she's got food I never tell him not to do that I've never in the history of the show told him not to do that that is an act of compassion and act of love and I would do that myself in that situation but the idea that

carte blanche across the board that the bible teaches we're supposed to take we're supposed to feed our parents in retirement regardless of how contrary and lazy and slothful and drug-induced they've been is is not a biblical teaching dennis so um that that's just not what the bible is talking about here uh so yeah we do and by the way we do teach first thing you do with money is you take care of your household. We teach that. And if you've ever read the book I wrote, there's a bestseller called The Legacy Journey.

The first thing we teach is to take care of your own household. Not MasterCard, not the student, like you feed and make sure your household has food, shelter, utilities, yes. Exactly. And so all of that lines up with this particular scripture. And honestly, too, I think some of the, I mean, we get a great situation like what you just outlined of like you got two million bucks, your mom, you know, has nothing, the dad is that, and yes, you have the ability to take care of her. But also the truth is

40% of Americans can't even cover a $400 emergency in cash. So the real truth is, most people can't even take care of their own household, let alone someone else's. And then they feel this horrible obligation of, oh my gosh, everyone around me, for some reason, I have to be the hero in everyone's story when you can barely take care of your own household. So getting your own household in order is priority. And if you're able then financially not to sink your ship in order to help someone else absolutely and we talk about that all time generosity is we tell you to freaking give at the top of everything like you know so like there is that level of generosity but you have to be wise about it and in these relational situations and i think some people feel um yeah like they have to and they can't

even take care of their own a lady called deloney and i yesterday and her 80 year old mom the kitchen was her kitchen was messed up the 80 year old mom and the lady said i need to borrow 10 000 to buy my mom's kitchen because the lady was broke. Mm-hmm. Yeah. And no, you can't do that. Can't do that. Well, you're not compassionate. Yes, I am compassionate.

We have to figure out some other way, and I came up with some other ways to fix the lady's kitchen, okay? But this idea that if you live your life on the basis of the way this guy is interpreting this scripture, it means that you don't have to plan for the future because your kids will take care of you because the Bible demands it. And that is false. the Bible does not demand that. That's what I'm saying.

When you say carte blanche, I don't have to say for retirement, my kids will take care of me. Have you heard people say that? I've heard people say that. That is not a biblical statement. And that's the way this is reading out in this email. Yeah.

So, no, sorry, Janice, wrong answer. Wrong question, whatever it was that you did here. It's a great. It's a good question. I mean, it's a fair. It's a good discussion to have because there's always this angst between, I want to care for the people I love. Yes.

And how far do I go giving a drunk a drink? Yeah. You know, I mean, okay, you know, they demand to stay in an $800,000 house that's paid for, but they're trying to live on Social Security and they can't buy food. So is it Christian love to support that ridiculous? No. You sell the $800,000 house, you buy food. $400,000 condo and you buy some groceries.

That's what you'd do if your kids weren't there to prop you up. And in that case, I would say you're not morally or ethically obligated to take care of your parents in the middle of their stupidity. No, they're making dumb decisions, and I'm not going to support that. And the Bible does not call for you to do that. God does not call for you to do that. But it does call for us to be kind in the process, to be gentle. And to be generous people when you, you know what I mean, when you have the ability to.

but real generosity changes the situation. It doesn't put a mask over the problem. Yes, bad behavior. It's not a band-aid. That's not the point of generosity. That is not real generosity. That is fake generosity. That's shaming.

And so, but I, and Dennis, the reason I'm kind of leaning in on this, I think this is what you were saying, but I may be giving you too much flak here. I'll give you, I'll back off a little. It does say today's question. So he had to make it in the form of a question. No, our statement. says today's question.

Okay. But, no, he's making a statement. But the thing I don't want people to buy off on is this idea that you do not have to be responsible because your children will take care of you. That's not correct. Okay. And that is not compassion and that is not love. By anyone involved in the conversation, real love would say, no, you have to be responsible.

Real love would say, I choose. to be responsible so that I'm not a burden on my kittos. That's real love and real compassion and real maturity instead of a cop-out. And so, yeah, that's why we say that, Dennis. Hope that helps you. Tom is with us in New York. Hey, Tom, how are you? Good.

How are you, Dennis? Better than I deserve. What's up? So I got a question. My wife and I, we just bought a house in March, and we owe like $4.40 on the mortgage. And we don't have any other debt besides that, but we have a brokerage account that we have some money in. She wants to use probably half of the majority of it on a bathroom in the basement that's finished. I would rather either put it towards the mortgage principle or looking to refinancing or recasting the mortgage.

We don't know which one's the best route to go. What's wrong with the mortgage? Why would you rate rates have dropped since then to get a better deal? We're at 7% right now. Okay. And so you could get 5.7. So you could save 1.3 if you want to 15 year right now. Okay.

Okay. On 440. Okay. And how much is in the brokerage account? About 85. And why did you not put that down on the house in the first place? It was kind of like a timing issue. We sold our old house and we used equity.

in there as a down payment to get a 20% to we avoided the PMI then we just threw that in the brokerage account so we're on the timing issue it was a decision to not put it all down on the house instead put it in a brokerage account yeah I guess so yeah okay her reasoning for the bathroom in the basement

is we have a young child a year and a half and one on the way and as they get older, you know, the plan is to have them kind of be down there. Well, Tom, that'll be in like four to five years. What's your household income? About 260. Okay. How much of the bathroom?

I'm going to estimate, like, 50 grand. Okay. It's a nice bathroom. Yeah. Okay. But that's your, you've not really actually gotten a bid, right? We haven't like gotten any contractor or anything to give us the actual quote yet, just from what we've looked at.

Do you have an emergency fund in addition to the brokerage account? Yes. Okay. All right. All right. All right. Well, if you had, this would not be a question if you had to put it all down on the house. Because then, if you had done that, you'd have a lesser mortgage.

And then the only question would be whether it makes sense from an interest rate perspective to refinance your mortgage. And you'd say, oh, we don't have any money. So if we want to do a bathroom, we have to save up money out of our $260,000 income. Right? So I'm trying to back into that and go, okay, what does that tell me about where I should go now? Yeah, I mean, I throw the 85, Tom, at the house. You guys cash flowed the bathroom. And again, you're going to have a newborn.

I mean, I just know this from experience. I have a 10, 8, and 6 year old. So I'm like, I mean, for the first, I mean, you don't really leave them alone playing by themselves until like, you know, forish, down in a basement. You know what I mean? Where they can play and they're going to be okay and they can get. I mean, so you guys are a few, you know, two years or so out of even needing that bathroom down there because the kids, quote unquote, need it. Do you know what I'm saying? I'm like, it's not urgent to me.

So out of 260, you ought to be able to pay for the bathroom in one year. I'd cash flow it. I would do it. But yeah, I would give yourself a beat. In one year. And I kind of do hate, too. There's a level of like the contentment side, Tom, of you guys just bought this house. You're in a brand new house since April and it's been what six months and you guys are

already like, okay, what else can we do? What else can? I don't know. A part of me is like, just be. Just be for a year. They all are okay. You know, there's no, there's no urgency in it. Actually, both things could sit for a year.

Neither one would. Because 1.3 savings on your interest rate is good, but it's not huge. um so um you think rates are going to come down further too that's another question yeah probably i think i i i predict that seems to be indicating that all the pressure is that way uh with the fed direction and everything else so probably uh but you know you understand that um weather forecasters and economic economists economists are the only ones that can be wrong most of the time and still keep their job. So we don't know is the bottom line. But yeah. So I, okay, what would I do? All right, number one, I think that she doesn't think she's ever going to get a bathroom if we don't use this

method because you all are probably not on a good detailed written budget and she can't see how 260,000 leads to a $50,000 bathroom. I can see that. But the way you all are handling money is not signaling her that she that's going to happen so i think you're going to have to get a detailed written plan that the two of you together say all right we're going to save four thousand dollars a month and in 11 months we'll have the money 12 months we'll have and in the meantime we're going to get actual bids from contractors and figure out what we're going to do we're going to pick everything out and as soon as we have the money saved over the next 12 months or so um and we have the budget and we have everything dialed in a detail about what we're going to do what we're not going to do

We're in agreement on all of that. By then we'll have the money saved, and together we're going to accomplish that by not eating out as much and maybe not doing that trip and doing a few other things. And then I am going to take the $85,000 and I'm going to refinance the mortgage, reduce the mortgage balance by $85,000 and get a lower interest rate, get in touch with Churchill mortgage. And all that next year. You're saying wait a little bit. No, I'd go ahead and do it now.

You would do it all now. I'd refinance the mortgage now. You wouldn't wait to see if. No. I mean, if you want to wait two months or something, that's fine. But I'm not going to wait a long time because they should have put down the 85 in the first place. Yeah. And so I'm going to undo that.

And if I had done that in the first place, what would be the way I do the bath, the way I just described? So the way I backed into the answer, Tom, is what we would have told you to do if you to call it and ask us in the first place. We would have said, put the whole amount down and do the bathroom later or buy a different house that you don't need a bathroom down there. I would have told you one of those two things if we had caught if we'd have been involved in the conversation early and so all I can do is go back to the last time that we were standing on solid ground and go from there forward and that's that's the way I'm

analyzing this and that's how Sharon and I would make the decision and Sharon would be perfectly fine and Sharon loves to do upgrades like decorating upgrades or like her love language okay so if that is an actual spiritual love language but yeah if there is one she's got it and so but and she doesn't mind if we tap the brakes on that as long as I'm not over here spending the same amount of money on something else right that she doesn't agree with you know wait a minute you chose that over me no we're not doing that but on the other hand um if we if we were in this case and we said okay we're going to buckle down the budget we're going to save up the money we're going to do the bathroom.

We've done that bazillion times in the Ramsey household. And she would not be complaining about that. But if she didn't see how we were going to get there, then she would have a problem. Yeah, because if she has hope that, yes, I will be able to get a bathroom in a year, then we're going to be okay. And, I mean, you guys know this, Tom, I'm sure,

but those renovations can swing dollar amounts so far depending on. Scope creep. Yes, depending on materials you pick, finishes all of it so just be aware bathroom becomes a sunroom and if it's the bathroom where two kids are going to be don't make it nice

I'll just say that much bathroom off of our playroom nasty nasty nasty we clean it but it's hazmat because they'll be learning to yeah they'll potty train in that bathroom Tom so just for sure hazmat

especially if you got boys did I say hazmat is crazy it's crazy you know this could be a different podcast but I'm like I don't get that should be how did that how did that happen Charles how did that I don't how did that get there how did that happen y'all can we we got we got like 30 seconds I probably shouldn't tell it no no okay okay don't tell it anyways it's a fight this stuff this stuff gets he peed in a candle on our porch last weekend I was like Charles what are you doing he's putting out the candle

I don't know. It kind of looked fun. And I was like, gross. Gross. So anyways, that's potty training for you, boys. I don't get it. Hey, don't just set goals. Hey, don't just set goals in 2026.

Learn how to reach them. The 2026 Ramsey goal planner is here. we've got just a few of them left. They're packed with monthly content from Jade or Rachel or Deloney each month to help you stay on track with your money, your faith, and your relationships, and follow through on your goals. We sell them out every year, did I mention that? So don't wait.

You get yours for 4997. These things are beautiful. They're well designed at ramsysolutions.com slash store. Or if you're watching, of course, on YouTube or podcast, just click the link in the show notes. Chris is in Washington, D.C. Hey, Chris. Hey, Dave, thanks for taking my call. Sure. How can we help?

Well, I'm going to be a bit of a unique situation. I'll be retiring at the end of the month at the age of 50 from the federal law enforcement retirement system. I am getting a second job, so I'll be working a job and collecting my pension from that. Wow. I have, yeah, I have $1.4 million in my TSP. Wow. And, yeah, started wise advice when I first got on the job. put as much money into it as I possibly could.

So it's grown quite a bit. So based on the rules within the federal retirement system, I can withdraw on that penalty free upon retirement. So we're thinking myself and my wife about withdrawing $300,000 from it to purchase a late property, which we've been interested in doing, you know, for a while now. We would then cash flow of the development over it, over maybe the next five years and maybe eventually build a house at the end of that five

years but um we probably sell the one we're in to do that or or make another decision uh finish paying off this mortgage before we decided to build the second house i just was wondering um if it's a good position it's just a lot of money right and i know i'm going to have to pay tax on it um so just wondering what your thoughts on that were you have other money other than the million What's your home worth? My home's worth about $950,000. And you owe how much on it? $2.70.

You got them, Chris, with the Lake property. I'm just thinking, the problem is this. The downside is that the upside is you've done, or the positive is you've done an incredible job. saving money and you're in a very very good position you're a millionaire and you retired at 55 years old way to go I'm proud of you absolute rock star very cool now then I start to think about okay if I'm going to buy a second property with 30 more than 30% because I got to pull more than that out to pay the taxes unless you could cash flow the taxes but if I'm going to pull 30%

of my nest egg out to buy a second home for enjoyment but what's bothering me is I don't get enjoyment because there's not a house it's just dirt and it's going to be developed and the house is not going to appear for another five or six years in what you outlined so i'm not getting anything except some dirt right now if i got a lake house and i got enjoyment today you found a little lake cabin for 300 grand and you did it it would feel different to me because you could actually go do it but this is like um you've done such a good job delayed pleasure to get it to a right result now you're doing it again there's not but you know we can only kick pleasure down the road so far we need to we need to eventually have it um and gosh

that's the only thing that's bothering me about it was there something specific about this one property chris and like this a specific lake a specific area of the lake was there i don't know ties to it or you just saw it and thought oh this would be a good spot no we've been thinking for a while so definitely the specific lake, and we've, of course, seen prices go up exponentially, and my concern would be they continue to go up over the next five years. They will. Instead of getting there. Yeah, I know.

They will. The, or they'll go down dramatically because I own a lakehouse, and we, and the, the, the worst category of real estate and the best category of real estate for price is resort property. so beach mountain lake those are the ones that go through the roof when times are good faster than single family regular houses do and they go through the floor as soon as things turn sour and so they they follow the luxury jet market and so um it's um way up or way down it's very volatile uh and so i mean there's been years that my lake house was kind of sad and then there's been years it was one of the biggest things I owned you know because it just shot

people were crazy all of a sudden and but and it comes and goes and waves it's very emotional buying public for that um the overall answer is I probably would do it uh the only thing um is there acreage involved like you're going to sell off lots you said development it's lakefront it's in a you know it's an undeveloped lot on the lake I mean I mean how big a lot What is it? Clear it, two acres. Oh, you've just got to clear it. So it's not really, you've got to get it ready to build on this all.

Yeah. But you could do that, and you don't have to do that over three years. You can do that in 10 minutes. Well, probably. The dozer of a chainsaw. You know, I'd probably put the money towards a dock before I built the house. Okay. Yeah.

I would do that. But I'm going to continue to contribute to another 401K, my post-retirement job as well, until I fully retire. yeah so what will your household income be with the new job the old pension and your wife 350,000 okay yeah okay so you can build it back up pretty quick right if you took the 300 out and you don't move to the lake until you'd all just quit right yeah I mean that's what you about selling your house correct yeah um yeah i think i think you do that i like i'm catching up it took me a minute but yeah well let's clear it put the dock on it and but let's move towards building sooner rather than later my even like that plan even if you don't move down there

even if you just go there for two weeks in the summer or three weeks in the summer plus weekends and that kind of stuff and um yeah sooner rather than later so but yeah i i i think the numbers are going to work out fabulously for you and you guys have been so responsible in the other areas that it leads me to believe this is all going to work out probably you're i think you're being conservative on how fast you're going to be able to do this because you got you're just really y'all have done an excellent excellent job yeah that's um so um federal government employee ladies and gentlemen 55 years old retired full pension He said even.

What? I think he said 50. Oh, 50 years old. That's right. Fully retired with over a million dollars in TSP, the Thrift Savings Plan. Okay. Starting from nothing and has a $900,000 house. It's only a $200,000 note on it.

So he's got a million half net worth, $700,000 net worth at 50 years old. That's a classic model of a Baby Steps millionaire. That's the classic model. Now, somewhere in there, too, I've got to get this other house paid for. for. I've got to get that mortgage paid off. That's the other thing is scratching my head

in the back of this. So there we go. But that's good. That's living like no one else so that later you can live and give like no one else. But at no point do you get to live and give like no one else

without using wisdom. So to his credit, he's asking for wisdom on how to best do this. And he's a late guy. I mean, if you heard him earlier in the call, he said,

you know, people told me early to put as much in the TSP. And I, you know, there's a diligence about him that makes you say on the,

other side of this decision he's he's going to follow through he doesn't his character follows through yeah this is not this is not a guy who jumps from thing to thing no no there's a consistency because within because you can take out what is it within your 401k this is not the growth no I know I know but you can without penalty of what you put in not the growth of it no only if it's Roth the Roth IRA you can okay TSP is there anything that you can take out without penalty so the whole thing will be there's no penalty on this It's only tax. It'll only be taxes.

Because if he, TSP is thrift savings plans for federal government employees only. And once you reach retirement age. If they retire, like he's probably got in his 20 years. Yes. Or his 30 years or whatever. When you retire, you no longer work there, the TSP, the penalty is taken off of it. Okay. So it's just the tax.

But it's unique only to that. It doesn't apply to 401K. Welcome back to the Ramsey show in the Fair Wins Credit Union Studio. I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality, number one, best-selling author. My daughter is my co-host. Alexander is with us in Idaho. Hi, Alexander. How are you? Better than I deserve.

Cool. How can we help? I'm just trying to figure out how much of a step back it would be to my life if I were to purchase a 20-25 Harley-Davidson-Loder writer S. Uh, the bike's about 30,000. Thank you. I, you actually know what that one is? Yeah. What's the, what's the tag on that? What's the price on that?

Uh, you know, MSRP is about 24, but I'm going to put some upgrades on it, pipe and, uh, heaty grips and all that good stuff, about $30,000 at the door. Yeah. So what do you make? Um, right now I'm making, uh, about $65,000 a year. Uh, and then, uh, my wife makes about 15. Uh, she works about 10 hours a week. I'll show them you each have a car.

Yes. I have a truck and she has a, you know, a crossover. Yeah. What kind of debt do you guys have? Currently, no debt. We are actually on Baby Step 6 and 35 with two little kids. There's a couple kickers about that, though. I guess the first one would be that right now we're spending more than we make.

because, you know, how would you pay for the Harley? Oh, just, just extra money. So about two years ago, we were gifted about $200,000 from Sarah's grandmother when she passed away. And you have how much debt? No debt, but they're living above, how are you living above your meat? You're spending more than you make. Why? We saved a lot of money prior to having children, and we are only going to...

Pulling out a savings every month. Pulling out of savings every month. How much? Roughly about $1,000 a month. Why? Why can you not live on $85,000? You know, pithing and 15% for retirement and... And restaurants and travel and vacations.

No, we're not doing a whole lot of that. Yeah, you are. You're doing something because a tithing does not cause you to not be able to make your budget. That sounded real holy, but I'm not buying it. Yeah, our mortgage is about $1,400 a month. That's not killing you. Okay. Well, anyway, so here's the thing.

I love almost anything that has a motor in it. Sure. Which is kind of why I don't like Teslas. because I like almost anything that has a motor in it. And so that bike is very cool. My Tesla will be his bike and your car in a race. I'll just say that. Go ahead.

And oh, yeah, well, that's not a – anyway. It's a very cool bike. And so what I'm trying to say is I completely understand why your adrenaline is up when you think about it. And I can get that way about a myriad of different things with motors in them. everything from a skid steer to a ski boat, right? So I get it. But I will also tell you that as a young man with two children and hasn't figured out a way to live on $85,000 a year

to invest $30,000 in a motorcycle that's going to be worth $15,000. $15,000 and about a eye blink is not a good investment. You're not in a position to afford this. But I guess a little bit more with our finances. I mean, we have about $250,000 in the house, house is worth about $450,000. We have a little over $210,000 combined in a work retirement accounts, and right now we've got about $150,000 in a separate mutual fund with about $80,000 in an emergency fund.

You have too much in an emergency fund, and you should pay off your mortgage. You're sitting on $200,000 worth of inheritance, $150,000 in mutual fund, $80,000. That's enough to pay off your mortgage. Why do you still have a mortgage? I think that's kind of one thing my wife and I, I guess, disagree on. I'm kind of on the plane of mortgaging, you know, paying off the mortgage, but then when we first received the money, and she was kind of along the lines of, you know, just to be safe, but it, put it as mutual.

There's nothing safer than a paid-off mortgage. Sure. It's much safer than a stock market investment. I know, but if I guess, I guess that's advocate here because, uh, I don't, I don't think we're going to be able to help you, honey. Um, no, I would not buy the motorcycle. You're too broke to do it and you can't learn, you haven't learned to live on less than you make. No, I would not do it. Holly is, where there's Holly's in North Carolina. Hey, Holly, how are you? I'm good. How are you? Better than I deserve. What's up?

I'm calling because I have a situation with my eldest daughter, um, where she made an agreement with my husband and myself, along with her two sisters, to pay her student loans after graduation that we took out for them. They are parent loans, but the agreement was that they would pay them when they graduated, just as we had paid for our education, my husband and I are both nurses, and we put ourselves through school. And they disagreed with how the money would be spent for college. We wanted them to stay home and commute, possibly to save money, but they really wanted to go away, and we said the debt is on you. We did help them through college with other expenses along the way. It wasn't like we just abandoned them, and we continue to provide for my younger

daughters here and there. My oldest daughter now is refusing to pay her loans and do good on her agreement with us. It was a verbal agreement. Her sisters are paying their loans. They know that it's their responsibility, but my oldest is refusing to pay the loans. What is she saying? She's saying that she doesn't care, that it's our problem. And she has cut off communication with us. So we have been told that we have no recourse. You do not have any recourse. Right. you borrowed the money she didn't borrow the money right right I know and I've accepted that my it's upsetting though because it's almost a moral issue yeah it is you shouldn't have done this to your daughter you put her in debt to you yeah no you called it a blessing and acted like you

did something righteous no not really no I mean this is a really really really bad idea Yeah. It was a bad idea. And it's cost you guys a relationship. It's horrible. The relationship parts, that's so heartbreaking. Well, what you're discovering is is that these things, that math is not independent of relationships, that the borrower is slave to the lender. And she didn't like being your slave anymore. Well, she wanted to go to college, and it was the only way to pay for it. No, no, it wasn't. No. She wanted to go to a certain college, and it was the only way to pay for it. And you endorsed her doing something you didn't believe in by borrowing the money in your name to do it.

I think you misunderstand me. You said she could go to a community college and pay for it, and she chose to go to a fancy college and borrow the money in your name. It wasn't really a fancy college. It actually was a seven-year medical school program. That is the cheapest probably in the country to get into, and she got into it, and she was very fortunate to do that. If I were in your shoes, I would call her up and say,

honey, I made a mistake. I shouldn't have done this. I call up your other two daughters and say, honey, I made a mistake I shouldn't have done this. We're going to pay all these loans. They're in our name. We hope your children have a great life, and we'll never make the mistake of borrowing money

for someone else ever again. It was our fault. So we have a very popular and award-winning documentary that is now free to watch on YouTube that we did a couple of years ago called Borrowed Future. We spent a lot of time delving into the student loan epic failure that is in America today. Now $1.8 trillion worth of student loan debt. Where does that come from?

Whose fault is that? Well, it's Congress's fault for starting the program. It's Congress's fault for not stopping the program once it was considered an abject failure, and they still have not stopped it. number one. Number two, we tried to get to the mathematical source of why people keep going into student loans, why it was normalized to take out a student loan. And you can blame that on higher education because they've run the cost up through the roof.

The inflation rate of higher education is about 3x, the normal inflation rate. But they're building lazy rivers for college freshmen really are. A couple of campuses have this now. They can ride an intertube through the lazy river under the dorm. I mean, it's unfreaking believable what they're spending money on. And then they're charging it back to your children in the form of ridiculous tuition and ridiculous housing costs. So it's higher education's fault. It's Congress's fault.

It's the 18-year-old's fault because no one ever told this 18-year-old no ever in their whole freaking life for anything. And so they expect to go do anything they want to do wherever they want to do it. So there's, you know, it's their fault. And then Rachel Cruz comes in and goes, you know, at the core of it, though, is a parenting problem. It's not a student loan problem, the parenting problem. And the reason you said that was. Well, because in my head, I'm like, you know, they're 18.

So yes, you are a legal adult and you're signing up for something. It's your signature on it. But also you're 18. And the adults in your life should be the one stepping in and guiding and giving you wisdom. That's actually going to help you and not. hurt you. And so yeah, I mean, for parents to just sit back is negligence to me. I'm like, you know, step into your kids' lives and talk to them about the repercussions of this because we get calls all day of six-figure student loan debt. And it's not working in people's favor. And the truth

is, too, there's still other options. You know, you can go to community college. And a lot of states now, there's free community college, you know, a lot of places. And so you can go, go get your associate's degree and then transfer to a university if you want to get the bachelors, you know, for the last two years but save just be wise about it and instead it's kind of this like well it's so expensive no one can afford it so just go wherever you want to go and that's that's the message out there so remember the first time i got that call and i just i realized that as that your mother and i are dinosaur parents we're from a whole different world than some people a guy called me from michigan he said my son told me he is going to this college that we can't afford

And I thought to myself, you know, that's different because when it comes to my money, the 18-year-old doesn't tell me anything. I tell them things, but they don't tell me stuff. That was my first reaction. It's the parents are wusses. They're enabling wusses instead of actually having a backbone and going, how about no is a complete sentence? You know, no. And like integrity, I meant it, you know, no. And then we can explain why.

maybe if I have to but so but like you know um probably good parenting yes so I mean here's like here's an example okay one of our children which won't be named almost left the family because that child decided they were going to apply for colleges other than the university of Tennessee and so they got accepted into a SEC school Mississippi no Auburn was it Auburn okay Auburn almost as bad and so another SEC school but it's slightly across the state lines like 50 miles and at that time it was triple the tuition it was double for apparently about the same degree so you're going to pay double because you want to go across the state line 50 miles for basically the same degree and basically about the same level of football

I mean it's really it's you're going to pay double for apparently nothing and so the discussion was no or you've got to figure out a way to pay for it and then that person couldn't figure out a way to pay for it and so she decided to graduate from the University of Tennessee where her parents were willing to pay for in state tuition go vals go vols okay so now I'm an alum it's great and now you're now you're famous no I was going to go to UT it was a little bit of a yeah but it's a little bit of a flex there a little bit of flex by the middle child but yeah but the so I mean we have these discussions in our house right so but here's the thing that the If your child comes in and says, I want to go to a school that we cannot afford

and you say, I don't think you should, you don't go take out a parent plus loan and pay for with your signature a decision that you think is unwise and unhealthy for them. And then be shocked eight years later that everybody in the whole story is pissed at you. You caused this because you endorse this. stupidity. And that's the problem you get into. So there's zero chance that any of you should ever take a parent plus loan. And there's zero chance that you should give a child who's going to take out student loan debt, a dime of your money, of any kind, zero support. If you leave home and go to a college on a student loan, you should tell your kid, you are 100% food and everything

on your own because you are stepping outside of my wisdom. I am telling you the best thing you can do is go to a school that we together can pool our money and pay cash for and you need to study and get a degree that actually has use, not left-handed puppetry. And so you're going to study something and you're actually going to go to class and pass the class and together you're going to take a job and you're going to get, we're going to go to in-state tuition, we're going to go to a school. We have the money to pay.

for and that we are in agreement on what is good for you. It does not affect me personally where my kid goes to school. It doesn't, I mean, what degree they get. It doesn't affect me personally. And so any guidance I force upon them or persuade upon them is an act of love. So this idea that you're going to borrow money in your name on a parent plus loan to cause your kid to go to a school that you don't think they ought to be going to. There's so many dumb things in that sentence.

Yeah. And not to keep extending the point, but the last caller, which I was a little shocked that, I mean, you were, you were, you laid down the law with her. Do you, is there any moral, though, obligation of the daughter at all that they shook hands and had a deal? Absolutely. She promised you, if she called us, we'd tell her to pay it. Mm.

Because she said she'd pay it. Yeah. She should keep her word. Yeah. You know, you can't claim victim. You were there at the party. Right. Right.

Yeah. And so if you promised your parents, you would pay the Parent Plus loan, you should do it. But as a parent, you set up a 100% guarantee that there was going to be a relationship problem because they are strained because you got involved and caused them to make a bad decision by allowing it with a you borrowing the money to do that. And then expecting them to pay for the mistake that you knew they were making and you financed their mistake. of course they're going to be resentful of that later. There's a hundred percent chance they're going to be resentful of that later. Well, and what sucks is you're 18, and again, your frontal cortex isn't even formed. You know what I mean? I'm like, you're a kid. You're like, you're 18. You're a child, you know, and that's what's hard.

Yeah. Is they're making these massive financial decisions as a teenager? And you're like, oh, my gosh. You can't buy a gun and you can't buy a beer, but you can borrow 150 grand. borrow a mortgage of I mean it's just it's so freaking stupid it's just stupid

it's all it is it's only thing you can call it and so to participate in that system as parents is not an act of love instead you go hey you're going to a school we can all pay cash for and study something we can all agree on is good for you and if we can't agree on all that

you're going to make 100% of the decisions on your own You can't keep an 18-year-old from leaving home and going $150,000 in student loan debt, but you can say I'm not giving you any emotional or financial support for your stupidity because I love you and I'm not going to endorse you bringing harm to yourself. You can have the backbone as a parent to say that instead of going, well, they're making unwise choices and I think I'll finance it. Of course they're going to be resentful later. Of course.

And then don't be shocked. that they are. In the lobby of Ramsey Solutions on the debt-free stage, Brad and Amanda are with us. Hey, guys. How are you? Hi, Dave. Hey, Rachel. Hi, you guys. Good to have you.

Where do you guys live? Harrisburg, Pennsylvania. Oh, fun. Well, welcome to Nashville. And all the way here to do a debt-free scream. How much have you paid off? $130,000. I love it. And how long did that take you? 20 months. Good for you guys. And your range of income during that two

years? $170,000 down to $120,000. Okay, cool. What do y'all do for a living? I work in construction. And I'm a nurse. Okay, cool. So why the 50 drop? That's interesting. We had a baby. Oh. So I'm mainly a stay-at-home mom now. Congratulations. So you've kind of gone to part-time or no time. PRN, yes. I love it. Good for you. How old's the baby? He's almost 10 months. 10 months okay so right in the middle of this journey 10 months yeah the majority of it yep that's great what kind of debt was the 130,000 most of it was student loans we also had a helock personal loan and a little bit of everything else sprinkled in there we were very normal ah how long y'all been married almost almost five years okay so just long enough to get in a big

mess okay so what happened 20 months ago what was the wake-up call the inspiration the what was it that's jogged you into this? This started out like every success story. I was doom scrolling on Instagram and I saw about a 10-second clip of your show and it was very drama-filled and I had to know the ending. So the next morning I looked up the episode and what started out is just curiosity ended up eight hours of your show. Oh my gosh.

Yes, eight hours straight. Binged. Yes. And I had never heard anybody talk about money the way that you guys do. And I was amazed. And whenever he came home from work, I was like, have you ever heard of Dave Ramsey? And he said? Yeah, I had heard of you before this, but didn't really understand your principles or didn't really implement any of them.

All right. I'm unbelievably curious. What was the show? What was the drama that hooked you? It was a woman who had called in and she was in a very bad situation with her partner. There were kids involved. There was, it sounded like financial abuse and potentially something. other abuse and you were walking through it with her until you realize you're in danger now.

Oh, yes. I remember that call. Yes. It was me and Rachel. Yep. Yeah. I do. Then it like cut off and I was like, I have to know what happened. Give me the rest of the story. Yes. Oh my gosh. That's crazy. And then you went watched eight episodes. Yeah. And then poor Brad comes in the door. And you're like. And I bombarded him. Yeah, I bet you did. Well, your eyes are red. You've been watching eight hours of you two. She's like, listen. Listen. I literally was like. We're going to pay off all the debt. We're going to go do a debt-free scream, and I'm going to get a debt-free shirt. Okay.

And he's like, I'm not going back to work again. Brad, what did you think? Which she kind of had this whole new plan of how to do money. Well, that's very much like Amanda to do that. And I was like, okay. You know, and I'm one that, like, I react slowly, so I was, like, thinking about it. And it's like, well, we could definitely do that, you know. Yes, yes.

Okay, so what was the first step you guys did as a couple? Did you sit down and do a budget? Did you map out your debt? Like, what was the first step? Because there's going to be some people maybe watching this clip, you know, on social media and see it. But what would you tell them? I think it really started with just like adding all of the debt together. And it's like, oh.

Yeah, we didn't realize it. Yes. It was just sitting there the whole time. And I was like, oh, it's bad. It's $130,000. Lots of little stuff. Yep, just added up. And it was a, you know, lightball movement.

It's an oh crap moment. Yeah. We really do have to do this now. Oh, my gosh. Yeah. And so then what happened? Well, we knew that we wanted to start a family. And this was like a large step in just getting secure before having a child.

And definitely after getting it paid off, you are a lot more comfortable and flexible. And whenever I got pregnant, it was like, we got to go full send. So I was working six or seven days a week as a nurse on the floor working two jobs up until four days before I had my baby. Whoa. I got cleared by my OB. I wasn't doing anything dangerous. But you were, yeah, but workhorse.

I'm like, you're like, we're going to do this. We're going to do this. My coworkers thought it was crazy. Yes. Yes. I got a lot of bad feedback, good feedback. Sure. But now after having a baby, you realize, oh, yeah, all day.

Before the baby, like, we have the time. We can do this because life just changes completely, right? when you enter in a new little family member. Okay, so for the 20 months, what would you say was the hardest part of that journey for you guys? For me, it was not seeing each other. I was going to say time away from each other.

Okay. All the work. We were passing ships in the night because I was doing hours upon hours upon hours, yeah. And of the 20 months, none of it you were pregnant. Yes. Wow.

Yeah, that is so hard. Okay, so now from the marriage perspective, because relationally, you know, you don't see each other. I'm like, that is. That's a sacrifice for sure. Would you say your marriage is stronger today because of it and because of you guys going through this journey together than it was even, you know, two years ago? Definitely because of like the communication that's involved in it. And we were very transparent with finances before it. But this definitely just reinforced all of it. Yeah. Wow. We know we can really lean on each other. So this idea that,

because we get the call, you hear it if you listen, that, you know, I don't, want the work life balance and I don't want my spouse to feel abandoned and y'all didn't you just went you just went to work all the time and you said we're going to communicate and communicate and communicate and work all the time and we're going to get out so that we can live like no one else so that later we can live and it didn't kill you as a matter of fact it made you stronger absolutely we chose um to be comfortable over being convenient so that's when we feel very comfortable now but we had to put convenience aside oh that's good yes during that process so good that's a good phrase uh did anyone make fun of you? Do people think y'all were crazy?

Absolutely. I got so many bad, so much bad feedback at work. So funny, because you were working so much. Was that the bad feedback? Or was it the paying off debt? Working so much while she's pregnant. That and also we had an eight passenger Subaru that

was paid off at that time and we sold it and we got a 20 year old van. And on the back of it, it says Dave Ramsey makes me drive this. Oh, great. Thank you. Now it's my And so people are like, what are you doing? Like, you're crazy.

Why are you doing this? Have you joined a cult? Yes. And I was like, yes, we did. We got Xander. We got every dollar. We just went full cent. You're all in it.

All in it. Yes. Oh, my gosh. All right. Now that you're free, was it worth it? 100%. Definitely. I'm proud of y'all.

Very proud of me. Because now you get to stay home. Yes, it's wonderful. Yes. And you get to like make these decisions without the stress to feeling like we have bills to pay. Oh, and all those people who thought they had a vote. are still at work. Oh, look at that.

I was just telling him, I said it's so weird because we don't really get any mail anymore. Like, bills don't come in the mail. It's just the newspaper. I was like, when I first started this stuff, 35 years ago, I met a guy. He said, I want more mutual fund statements in my mailbox than bills.

That's a good trade. I like that. Very cool. Good for you guys. It's awesome. You all. So proud. All right.

What do you tell people the key to getting out of debt is? adding friction to financial transactions so making it less convenient to spend the money and i really like the home-cooked meals yeah give me an example of the friction you did it made it hard to spend money well like obviously the credit card makes it too easy to spend money um removing amazon prime and uh not shopping on amazon as much as you can because it's too easy to click that button and it's sent to your door. It's amazing how much we stopped spending whenever we got rid of credit cards. I know you guys talk about it, but I don't think people realize how impactful that is. It's the truth. Wow. Who knew? Because you feel it with your money. You're thinking twice

about it. Yes. And I would add to that that you have to believe that it's possible. I didn't believe it was possible until I started watching your show. And I was like, we could do this. Yes. Oh, you guys are amazing. Congratulations. You're power couple, man. I'm so proud of you. You killed. You killed. You're doing so well. You're going to be in such a great place in another couple of years. And you've completely changed your family tree for your baby. I'm proud of you. Very, very, very well done.

Brad and Amanda from Harrisburg, Pennsylvania, $130,000 paid off in 20 months. Making $170. Now she's home. Making $120. Count it down. Let's hear a debt-free scream. Three, two, one, we're a debt-free. Yeah.

Wow. Wow. Well done, well done, well done. I have to let the social media team know that they changed a couple's life with that clip that they dropped for doom scrolling. Wow. is the one who perseveres under trial, because having stood the test, that person will receive the crown of life that the Lord has promised to those who love him. Newt Gingrich said perseverance is the hard work you do after you get tired of doing the hard work you already did. That's good. Hey, big news, the Fed just cut rates.

We all heard about it last week, and 15-year fixed-rate mortgages have dropped to the lowest we've seen in 11 months. Currently, 15s are sitting at 5.71. If you're financially ready, now's a great time to buy a house or put one up for sale. Lower rates could save you thousands. It could be moving the people loose, turning them loose, getting them off the bench, so they come buy your house. So buying an affordable home you love is possible when you work with a Ramsey trusted real estate agent.

These are pros that we handpick because they're high octane, high protein. If you're going to list a house for sale, you're going to buy a house. You need to do it with somebody who actually sells houses, not your aunt Sally who just got her license. I know she makes good apple pie, but she's not a good real estate agent. She just got her license. Don't use Aunt Sally. It's a million dollar house. That's dumb.

Find a trusted local pro for free at ramsysolutions.com slash agents or click the link in the show notes if you're listening on podcast or YouTube. Trevor's in Florida. Hey, Trevor, what's up? Hey, how are you guys doing today? Great, man. How can we help? I'm nervous. I'm ashamed, disgusted. I'm embarrassed at all. Um, I'm listening to the question because I really need guidance on this. Um, should I file for bankruptcy? Um, I made, uh, dumb mistakes

and now I regret it. Um, and I'm, I'm ashamed. So just a little quick backstory. Well, um, I purchase the house. And when I purchase a house, I kind of, um, I kind of, um, I'm, I'm ashamed. So just a little quick backstory. So I, um, I purchase a house. paid more than what I should have. Then fast forward, I basically ended up losing my job. In the mix of it, I bought when the interest rates and the prices were going up, and I really had paid over what their house was supposed to be. So when I went to sell it, I basically couldn't sell it because there was a lot of brand new properties going up, and the sellers were giving a lot more incenses.

So my house, beautiful house, was up for sale, but nobody was really interested because I wasn't offering anything. On no incentive, I couldn't compete with the other sellers. And then I ended up, my realtor kind of convinced me to, like, do a sub two contract, meaning I keep full financial obligation of the payment while I basically have somebody make the payment for me and once the house is paid, they take basically the house is theirs. Fast forward a year, well, not even a year.

The person that took over the payment has not been making the payment. So I did not serve on August 22nd. um that the house is going up before closure so i'm reached out to the gentleman i've been trying to reach out to the gentleman because i kind of knew that he was in pain um but i was unable to so i drove there last week and kind of spoke to him and he has no intention to believe in the property um and i'm i'm he has no intent of what say that again of leaving the property or kind of signing it back over to me to socket on the deed so he's living there So he's running a scam, yeah.

Yeah, so basically, right now I have no means to, like, get another lawyer because I'm going through a custody battle, because the mother and my kids move about three hours away. So right now... What do you make a year, Trevor? So myself, I make 40, and my wife looks 40, so it can buy we make about 80. Okay, right. um you can afford a lawyer and you need a lawyer

yeah um because if you file bankruptcy it's a lawyer and you have to pay a lawyer so you might as well pay one to evict the scam artist yeah so and that's what i was thinking of but again like my budget right now is super super straight like i'm paying about um eight hundred dollars for the other lawyer to get this case resolved because Like I said, like I mentioned, you don't have the money to file bankruptcy

if you don't have the money to hire a lawyer to throw the guy out. Well, I have a PC that I have right now, and I probably get like $50,000 for it. You have a what? A PC, it's a gaming computer. Yeah, okay, so sell it and hire a lawyer to evict the guy. You don't think it's going to take too long, though? It might.

It might, but we don't file a business. bankruptcy until we've tried everything else i'm not going to roll over in florida it's going to take them forever to foreclose how far behind it are you on the house because the guy's not paying the bill what january so about forty thousand dollars how many months that's uh february monthly for me okay oh this about eight yeah did the so when they sent you a notice they didn't just give you a date they just said the house is in default and we're going to foreclose if you don't straighten this up No, no, no, no, no. I already got served.

The 20 days for me to respond to the court has passed by. Or I looked along in today to see like the case disposition, because, um, he received his, um, the person that's living in the house right now received, he got also served. And he basically had 20 days also to respond. But now, I guess he was able to hire a lawyer and basically put like, oh, they didn't, they didn't serve all the tenants that are living there. correct me um so i guess he's well this guy's really good at scamming yeah

yeah so and but there's not a foreclosure date has not been set uh not yet yeah it shouldn't be in florida after seven months it'd be unusual it was okay so and and it's a little bit more reference to it so i right now we this all happened we moved to Puerto Rico and then we just came back so right now we're living with in-law then we were trying to get an apartment What were you doing in Puerto Rico? Just basically started a new job. I didn't work out with my 9-year-old education started like drawing back,

and we noticed it, and we just told my wife, and I was like, me to see what we're going. All right, Trevor. Okay, here's the thing. You're not bankrupt until you're bankrupt. You are projecting into the future that this is going to go one certain way, and we don't know what it's going to do yet. it doesn't sound good there's no question you've been scammed

but it's not costing you a dime today you're not having to write checks today unless you want to catch this thing up okay yeah so no but against since we move back and we're living with my

in-laws like I really want to move out but I'm unable to I've got six kids so it's not got anything to do with bankruptcy I understand that but bankruptcy doesn't get you a place to live for six kids no i understand that but it's just the fact that like it's it's already hitting my credit and like even if i was to find the money you don't think bankruptcy deems your credit no it does okay but you're getting ready drop an atom bomb

on your credit dude it's going to be it's going to be a wasteland for seven years for 10 years if you follow chapter seven and you're not bankrupt because nothing has happened yet to bankrupt you. You just have done a series of bad deals, and you keep jumping from one thing to another. You jumped into the house. You jumped out of the house. You jumped into Puerto Rico. You jumped back.

Jump, jump, jump, jump, jump, jump. You need to find something really steady and put your hand to the plow and stay on it. And I do recommend, you keep arguing with me, but you called and asked me what to do, and I recommend you get a lawyer, and you throw this guy in the street. and then you start negotiating with a mortgage company on a short sale with a good real estate agent that knows what they're doing the other real estate agent that you had was an ignoramus at best a con artist at worst

no one should have recommended you do that deal it was malpractice the law might not call it that I'm morally calling it malpractice it was horrible advice to put you into that deal those deals always end up this way they never end up any other way because who else moves into a house and pays full price for it plus and pays payments for 30 years and it's not even in their name people who are going to scam you that's who so that's what I would do if I were in

your shoes huh that puts this hour of the Ramsey show in the books we'll be back with you before you know it in the meantime remember there's ultimately only one way to financial peace and that's to walk daily with the prince of peace Christ Jesus Thank you.