The Ramsey Show - App - The Only Hack To Paying Off Debt Is Doing The Hard Work

Starting point is 00:00:00 normal is broke common sense is weird so we're here to help you transform your life from the ramsie network and the fair winds credit union studio this is the ramsie show jade waw ramsie personality number one best-selling author is my co-host today as we answer your questions. The phone numbers, AAA 825-5-225. Jade is in Memphis. Hi, Jade. How are you? Hi, guys.

Starting point is 00:00:40 Thanks for taking my call. Sure. What's up? Okay, so I am, we were in Baby Step 2, but now we're in Baby Step 1, and I got a notification that one of our credit card is in threat of being charged off within 30 days. and so I don't really know what we should do if I should take out a loan ask friends for that money

Starting point is 00:01:01 because they're trying to settle or if I should just let it go to collection. How much is it? It's 10,000, but they're letting they want to settle for 4,800. Okay, do you have any money? No, so I lost my job in October and I found that I was pregnant

Starting point is 00:01:19 and then I lost the baby in December. I'm sorry. And so we have less than the $1,000 in savings and we're paycheck to paycheck right now. Okay. I'm sorry. I'm sorry you went through that. What are you and your husband earning combined every month? Well, so before, I mean, my job, I got $60,000, so we took a $60,000 pay cut, and he makes $50.

Starting point is 00:01:46 Are you getting a job? Have you found a position? So I have got a new job. I'm a mental health therapist. but it's part time right now while I build clients. So I'm bringing home like anywhere from 500 to $1,000 every two weeks. Okay, okay, that's not that's not too, too bad. $500 to $1,000 every two weeks.

Starting point is 00:02:08 Okay, so here's what I'm thinking. Right now you really are, you've been through a lot very quickly, and I applaud you for jumping back on your feet really quick. Is this $10,000? Is this the only debt you have? Is there more? No, so we have two more credit cards. So 30 and then this 10, so 40. The other two were in payment plans for. So when I lost my job, I went into, I closed them and I went into payment plans with lower interest rates. But this one, they wouldn't work with us. And so we didn't have the money to pay it. Okay. Tell me a little bit more about, I'm just trying to figure out what you can scrounge up. If there's anything you can sell, how quickly you can get

Starting point is 00:02:53 or if you can even negotiate a smaller amount than the $4,800, likely not, but I would try it. See, I didn't know if I should call and I should try that. I would. Not unless you have the money line. Not unless you got the money. Is there anything you can sell off? Tell me about your cars. So one car we own outright and then one car we still have 10 left on, 10,000 left on.

Starting point is 00:03:17 Okay. And that's our main vehicle. How many kids do you have, hon? We have one. Okay. And we pay for daycare, so she's four, so we pay... How quickly is your income going to ramp up, do you think? I'm hoping within the month, so by February we should get back to my income.

Starting point is 00:03:37 Oh, wow. I get paid 53 an hour, and I have 10 clients right now, so if I can get up to 20 clients, then I should reach that by February, but this will be charged off by the end of January. How much is your... Let's stop a second, okay? Charged off does not mean anything. Okay. Okay.

Starting point is 00:03:58 You already have a debt that has gone to collections. Your debt is already bad. Agreed? Okay. Yes. Okay. When they charge it off, it simply means they are not going to count it on their books anymore because they don't think they're going to collect it.

Starting point is 00:04:19 But it doesn't make your credit. worse, your credit already is trashed. Yeah, it's bad. I just didn't want them to, like, sue us and garnish. They'll get around to that eventually, but charging it off is not, that is not a sign you're getting ready to get sued. How long ago, what did you pay the last payment on this account? Probably September. Okay.

Starting point is 00:04:42 You're, I doubt you're in any danger. Okay. I don't care if they charge it off. Guess what? If they charge it off, the next day you talk to them, They'll take the $4,800 because they still want their money. The only difference is just, the only difference is just they're coming up with these boogeyman in the closet.

Starting point is 00:05:02 Oh, we're going to charge it off. No, please. What does that mean? No, please. What does that mean mean? It doesn't mean anything, really, okay? So let's not worry about it today. I didn't want to be kicked while we're down.

Starting point is 00:05:16 I know. You could get sued, but even then you could settle. the lawsuit for the same 4,800, okay? It's not like every day this gets later and later and later, the chances statistically of them collecting it is smaller and smaller, so they are more and more flexible. They'll settle for less and less flexible. Okay. So it's not like it's a one-time, good-time deal.

Starting point is 00:05:43 This is a one-time okay deal, and you probably could get the exact same deal or better two months from now when you guys are back. on your feet. Okay. I think I'm just going to say, you know, guys, I, you know, we just lost a baby. I've got a brand new job. We simply don't have the money. It's a very kind offer for $4,800, but I don't have $4,800.

Starting point is 00:06:08 If I did, you probably wouldn't be late. Well, I didn't know if I should stop paying the other two cards that were current on to try to make a deal with them or if I should. No, just let it. I would just keep doing what you're doing. and let's get back up on our feet, and then let's get the debt snowball working and start paying those minimum payments you're paying. You can save up some money and call these people and say,

Starting point is 00:06:30 hey, I got $4,000, I got $3,000. You want to take that? If they want to take it, fine. If not, hang up on them. Call them back in two months. They'll do it then. You know, and just keep working your plan, working your debt snowball. But I don't think we're going to let them establish the urgency.

Starting point is 00:06:46 Okay. As a matter of fact, I know we're not going to let them establish the urgency. I literally, when you're telling this story, Jade, it's funny because I literally wrote a similar, about a similar instance in my book. And you're saying the same thing. What you just said about, oh, I'm thinking of taking these other credit cards and not paying those and paying it to other people. You feel that because of the stress and they're calling you and they're blowing up your phone and you're trying to focus on other things and they're just inundating you with calls and offers. And Dave is right. Like, just do what you know to do.

Starting point is 00:07:17 Keep those minimum payments going. get on your feet and don't let them be in control. Because if you let them be in control, all they want to do is take. They don't care about the fact that you need to buy groceries. They don't care about the fact that you lost a baby. They don't care about that. And so don't give them any more power. And don't give them any ammunition.

Starting point is 00:07:36 There's no sense in having a discussion. Yeah, that's why I stopped making assignments because I just wouldn't work with us. And guess what? Now they're very flexible. Okay. And guess what? They'll become more flexible. Three months from now, they'll be flexible.

Starting point is 00:07:49 be like little gymnasts calling you up I love it I'm going to give you a copy of my book okay jade yeah yeah jade to jade jade to jade hookup friend to friend I never meet anybody with my same name that's very that's a very new thing for me so and with a question that you've been through I know exactly it was meant to be on this publishing day there we go the book comes out today it's on the street what no one tells you about money the real key to getting unstuck from someone who's been there and has talked to credit card people at the credit card time charged off well well guys we know there's a lot of chaos As we know, there's a lot of chaos out there making you feel like you cannot get ahead with money.

Starting point is 00:08:52 A lot of messages, a lot of voices saying it can't be done. But you have more control than you think and then you're being told. This year, it's time to take back your money starting at our free every dollar live stream this Thursday night. Jade and I will be hosting this and hundreds of thousands of you, probably millions, will be, joining us. Thank you for that. It's free. We're going to give you the clarity in the middle of the chaos. And we can show you actually how to take back your money, get ahead with money. And we're going to be giving away $20,000 cash that night. Hello. No purchase necessary. Obviously, it's freaking free. Then I mentioned that it's free. And all you have to do

Starting point is 00:09:39 is enter the giveaway to sign up, right? All you have to do to enter the giveaway is to sign up. So register right now, and that puts you in there for the giveaway, and also send you up to get all the links and everything, so you can watch the free every dollar live stream. Jade and I will be doing it in front of a 2,500 person audience right here in our Ramsey Event Center this coming Thursday night. I'm looking forward to it. Me too. Yeah. Ramsey Solutions.com slash live stream. And I watched Jade do her portion of it the other day in practice rounds, and you guys,

Starting point is 00:10:13 Listen, I should charge you a lot for this, but it's free. I'm just saying it's really, you're going to get some solid information, some things to help you cut through all the garbage is out there. There's a lot of squawking out there. Have you noticed? And the only way you get rid of the squawking is to have a plan because then you quit listening to all the squawking. And everybody's got a dead-go opinion about why you can't win. Have you ever noticed that? And they're all people that aren't winning, by the way.

Starting point is 00:10:43 um hello people that are winning they don't they don't write in the comments section good point you ever seen successful people that stop and write stuff negative in someone else's comments section they don't and then your comment section if you don't know is not necessarily your youtube page it's just your life when you're sitting there saying something positive and they're going oh yeah but don't you know about and it's the little man can't get ahead and oh it's all rigged and the corporations the corporations and the and the taxes and the government and the inflation and Biden and Trump and oh, oh, oh, shut up. Seriously.

Starting point is 00:11:22 See, that's the chaos and the voices, the squawking I'm talking about. We're going to help you with that this Thursday night for free. Ramsey Solutions.com slash live stream. Be sure and jump in. And it's the free every dollar live stream. Catherine is in Dallas. Hey, Catherine, what's up? Hey, how are you?

Starting point is 00:11:43 God, how can we help? So I was recently laid off, affected at the end of the month, and now me and my husband are trying to figure out what we should do with what we have in savings to kind of make that work the best for us. Okay, what were you making? I was making about $42,000 a year. Okay, doing what? As a legal assistant.

Starting point is 00:12:10 Okay. And they laid you off? After Christmas? No, before Christmas. Oh, that month? The week before. The week before. Oh, I'm sorry.

Starting point is 00:12:22 So you were working for Grinch and Grinch? I mean, wow. Well, have, yeah. I can't imagine. If I was going to lay somebody off the week before Christmas, I would do it the week before Thanksgiving, just so I didn't do it the week before Christmas. Just give it some air. Oh, my gosh.

Starting point is 00:12:38 It came after they flew me out for a Christmas party. Oh. The week before. What did you do with a Christmas party, Catherine? That's one for you a free drink and went to my hotel there. Oh, boy. Oh, man, I'm sorry that happened. I'm sorry.

Starting point is 00:12:56 Okay, this sucks. Okay, anyway, aside from their lack of quality timing, who, let's see. So how's the job hunt going? So I started it that night after a bottle of wine. Good for you. A bottle of wine. It's a good thing to sign.

Starting point is 00:13:14 You know, start filling out your resume after a bottle of that way. Yeah, so I've got a couple of interviews lined up, and the goal, obviously, is to not have any laps. There you got. There you go. So you got a little severance. No, no severance. Oh. They told me that the notice was our severance.

Starting point is 00:13:32 Oh, I see. So you're just trying, you don't want to have any lack of. Good, good. No laps. Yeah. Good. That's a good plan. All right.

Starting point is 00:13:41 So how's the, how are you getting some nibbles? I've got a couple of interviews lined up, and I hope that, again, I hope there's no lapse, and that I hope that something, anything, I will do anything. Okay, can you cover it? Can you not cover the laps for one month on your husband's income? Yeah, what's he make? On my husband's income, he's military, so I think he puts down, like, if we are selling out a form, I think he picks down, like, 70,000 a year is what he makes.

Starting point is 00:14:10 When we did, because that night we did a breakdown of our expenses, If we changed absolutely nothing, we would be in the negative every month. How much? It was like a few hundred bucks. Okay. And how much do you have in savings? We have about 16,000 between the two of us. I was actually going to be a surrogate and had a miscarriage about partway through that process.

Starting point is 00:14:34 So we have a decent amount of money in a separate account because I purposely did not want to spend it that we have not touched. Aside from the 16,000? no that is the book okay so here's the deal here's the deal don't do anything just go get a job and if you don't get one and you have a gap for two or three hundred dollars take the two or three hundred out of sixteen thousand and then the next month you're back up to even right okay okay that's what the emergency fund is there for yeah now you've got debt and other stuff though, right? Yes, we do have debt.

Starting point is 00:15:14 So for right now, for right now we're not doing a total money makeover. We're just going to sit here in the middle of the hurricane until the wind quits blowing, and that's when you get the new job. And then we will assess the damage, and that might be that you have to pay a couple hundred bucks out of the $16,000, to float you for that one month until you get your paycheck going again. But I'm pretty deadgum sure, listening to you, you're going to have a paycheck in a month. I sure hope so

Starting point is 00:15:43 I mean really I think you are don't you I want you okay so if you don't if you don't if you don't it costs you 200 bucks of your savings right yeah it would cost me a couple hundred and if you don't if you don't the next month it costs you 200 more that's 400 whole dollars out of 16,000

Starting point is 00:16:04 whoopty doopty and if you start creeping up on two or three months you could easily pick up a little side hustle to cover that She's not going to do that. She's going to have a job because you've got too much going on here. You're going to get a job. So my point is, is you just don't do anything. And if you have to cover a little bit, you know, less than $1,000 out of the 16, it's no big deal, right? Mathematically.

Starting point is 00:16:28 Right. It just goes all with the fear of looking for a job and the pissed off of being mistreated and all that stuff mixes in. And then the math quits being clear. Right. Yeah. Okay, because my husband and I disagree. He wants to pay things off. No, no.

Starting point is 00:16:45 But you can't do that. You've got to get right side up first. As soon as you get back to work, the two of you need to combine your income, combine your debt, combine your savings, and start the total money makeover, and start getting, you know, save $1,000 and take the rest of that $16 and throw it at the debt, smallest to largest, once you're moving again. And, you know, I want to change your mindset on this a little bit, Catherine, and I know it's easy for me to say it on this side of things, but you got to look at this as an opportunity.

Starting point is 00:17:15 Instead of looking at it like, oh, man, I got fired. I got fired the week before Christmas and all these negative things. Maybe it's an opportunity for you to make more money than you've ever made and have a better job than what you had before in a more fulfilling workspace, right? It's not a high bar to get better people to work with. Yeah. This could turn out to be the best thing that's happened to you, but you got to switch your brain into that mode and it's going to change the way this feels for you. Yeah. And note to self, don't fly out to next year's Christmas party.

Starting point is 00:17:44 Wow. No bottle of wine before the interview. Yeah. They started budgeting and did that resume right after that first bottle of one. We're going to get everything straightened out now by our guys. Jesse is in Memphis. Hi, Jesse, how are you? I'm doing better than I deserve.

Starting point is 00:18:20 How about you did? Just the same, sir. What's up? Good, good. Okay, so little preface. I work for a great company, and I did fairly well last year, and so they were taking my wife and I on a cruise in February, along with a lot of the people who have also gotten, you know, the metrics.

Starting point is 00:18:40 And I was just wondering, I'm in Baby Step 2. And so I know I shouldn't be on any vacations or going out spending, but am I allowed to have an allotted, a side job to use on this vacation? And yes, I get paid for it. Is it just, you just need pocket money? You're allowed to do whatever you want to, Jesse. But, you know, what would we do if you're in Baby Step 2? This cruise is not costing you anything?

Starting point is 00:19:04 No, I get paid. whole time I'm gone, I get a room and board and the company vehicle down to the port. Okay, so just pocket money for meals or whatever. It should be included on the cruise, right? Yeah, but she still needs a little bit of money. It's just for like excursions or to have a little fun, this is the only vacation that I'm quote unquote planning. What if you planned it out and you've looked at it, what do you think is the number of

Starting point is 00:19:33 the amount of money you think you would need for it? that you would spend. Oh, yes, we did it last year, and I did, like, bare bones so I didn't spend anything, and I know that we could do it again like that. Great. Don't talk to me about it. I don't ever get to go on vacation. I did a cruise last year.

Starting point is 00:19:49 That's the plan. Oh, whining. Way. Agreed. Wait, let me talk, let me get you back to your senses. How much debt do you have? Okay. So I got about five in consumer, two cards that started this in Y'all in November.

Starting point is 00:20:05 So I've already cut that down from 7K, and then I got my car, and that's about 14. Okay. That's it. I would go, Jesse, but what I would do is I want you to reframe this in your head. Okay. The reason that we teach people to stay out of restaurants and stay out of vacations while they're in Baby Step 2 is total focus. that I have one job and that's to defeat the debt

Starting point is 00:20:37 because if I live like no one else later I can live and give like no one else I'm paying a price to win okay and that's how you frame this decision in your head not Dave I want to go and we're not going to get to you on vacation for a long time and we went on a cruise last year

Starting point is 00:20:58 come on man wait let me frame it let me frame it too like this no i mean really you you need to frame it up with i'm going to do this i don't need dave's permission to do it for sure you're like a grown man and you hit your metrics okay but um but you're i'm going to do this but i'm also going to make sure that the altitude and the attitude and the angle of my heart is permanently changed oh yeah away from the rationalizations and the justification that allowed me to get into this mess in the first place. That's why we do this. Because we're trying to shock your spirit into saying you're not entitled to vacations or eating out.

Starting point is 00:21:42 Those are entertainment luxury items while you're broke people. And I want people's spirit to be shocked. That's what happened to my spirit. I didn't have the option of doing it voluntarily. It was snatched for me because I was so stupid. I went bankrupt. So I got you beat hands down. on stupid right and I listen I thought whining was a little known form of prayer so I had whining

Starting point is 00:22:06 down too you know so but but what I figured out is is that you have to change the the altitude the angle of your heart permanently regarding these things so you never again talk yourself into something that down deep you know you shouldn't be doing I think this is fine mathematically Okay, yeah, and on Jade's point of view, I just wanted to add this real quick. I am picking up a side job this year, too. Doesn't matter. That should all go towards a debt. It's still, it's about, what we're talking about is you set the boundary, and once, if you have said to yourself, I'm getting out of debt, that's the priority.

Starting point is 00:22:44 If you let these little things start sneaking past the goalposts more and more sneak past, it's like when you say, I'm not eating any sweets, and then somebody makes the pan of brownies, well, already you've gone past there. Well, now you can, now you've got personal. But then what do you do? You slice off a little piece, and you go, I'm just going to have that little Then you go back in and you slice off another little corner and another little corner. And before you know, you've ate the pan of brownies.

Starting point is 00:23:04 Are you following me around? I saw you. That's what we all do. We've all done it. And that's a great way to think of it. You got to pounded brownies because they gave you the free trip. You get to decide how much you slice off. Don't slice any of it off.

Starting point is 00:23:18 The pan is just sitting there. And, you know, what we're doing is, you have to set new neuropathways in your brain. Yeah, that's the real part. That says, I'm done with this crap. So I would go, but I'm going to, you know, your side hustle is to set the new neuro pathways and go, I'm going, but I'm going to be unbelievably disciplined about this slice. Yes, very disciplined. Because I know the danger is not the actual slice. The danger is I'm still going back to the brownie pan.

Starting point is 00:23:52 Yes. Throw the pan away after this slice. That's the thing. That's what it is. I mean, that's what we're trying to. you have to permanently change your way you talk to yourself about this, the words that you use out of the abundance of the heart, the mouth speaks, the Bible says. And so the words that we use and the way we talk to ourselves and even the tone that we use

Starting point is 00:24:12 to ourselves about talking ourselves into or out of something reflects whether or not, you know, is your heart right on this? And that's the thing. So, guys, that's the lesson, the takeaway from Jesse's call, because it's a good call. And Jesse's obviously a good guy. And he's obviously a high-producing dude. And when you go out there, though, take a step further, what Dave just said. When you go out there, Jesse, what you can't do is, well, I can't spend any money.

Starting point is 00:24:35 I can't do. No, no poor mouth. You have to say, you have to form the words of what you want, which is I'm choosing. Everything's a choice. I've chosen to be grateful that I do this, but the company gave me this. Because otherwise I wouldn't be able to do it this year. Yes. Because this year, we're not going on vacation.

Starting point is 00:24:51 Yeah, but paying off my debt is my priority. Exactly. And that's how you talk to yourself. reset this whole set of tapes that's running in your brain, man. And that's why we do some of the things we do, y'all. It's like the, and what we're doing is the pendulum has swung too far to the consumer side where he says everything's okay. Just push the submit button, load the cart, right?

Starting point is 00:25:14 Right. And I can impulse anything I want and I work so hard and I deserve and all these things we tell ourselves. And all we're doing is swinging the pendulum back to the other side and go, you don't deserve nothing. Shut up. You broke people. man you know it's like you're quoting the book good job your book yeah the new one the new one that's out what what no one tells you about money the real key to getting unstuck from someone

Starting point is 00:25:36 has been there it's the emotional part of this that's right and that's what we're dealing with the neuro pathways the behavior shifts all of those things and you know the feedback loops you put for yourself yes uh you know one of the other things that goes with this too and jay i know you talked about this in there as well, indirectly. Not exactly the way I'm going to say it, in other words. But one of the things I did, Jesse, when I was at your thing, it's completely different from your question. But if it's in the same bucket of stuff, I don't do things mechanically,

Starting point is 00:26:08 tactically with how I pay things that aren't automatically always getting me the discount. Okay. Okay. So before there was online bill pay, because there was no online, okay? I prepaid my utility bills. To get the discount.

Starting point is 00:26:27 To get the discounts. Prepaid to get the discounts. And I set it on an auto calendar, right? I have automatic draft to this day on my checking account that goes straight into a mutual fund every single month, automatically out of my checking account. So I don't accidentally forget it. That's right.

Starting point is 00:26:46 I have automatic discipline all the way through there. There was a guy out a hundred years ago when one of my first bestsellers called Automatic Millionaire. His name is David, David Bach. It was a bestselling book. He said, just put everything on automatic so that you're automatically doing smart stuff. Automate smart, yes. And you don't have to think about it. You don't have to be built-in discipline with the systems, not like I'm going to grip my teeth and do this every time.

Starting point is 00:27:08 That's right. That's right. And that's the same kind of thing. We're resetting how we view this. And what's the attitude, the altitude, and the angle of my heart. on this stuff. Chris is with us in Denver. Hey, Chris, how are you?

Starting point is 00:27:42 I'm well. Thanks for taking my call, Dave. Sure, man. What's up? So I used to make good money. an engineer, and I was on Baby Step 4 before I knew what the baby steps were. Good. And then three years ago, I made what I realized now, two major mistakes in a row. I bought the biggest house I could buy with 3% down and PMI, thinking that house hacking would be easy.

Starting point is 00:28:10 I'm not doing Airbnb. And then a few months after that, I quit my job because I was miserable there, thinking I had enough savings. I can give you some financial details, but I'm wondering if you think I should sell my house. Tell us more. What's... What? Yeah.

Starting point is 00:28:29 Tell us more. Yeah. So I cool my job. Uh-huh. And then I realized that I would not be making my mortgage if I were to do health hacking. Uh-huh. So I pivoted and then started doing Airbnb.

Starting point is 00:28:46 Okay. And where are you? living. During this time, I was in the house, during renovations, I was living in the house. Sorry, yeah, I was living in the house. And then while I was Airbnb, while I Airbnb be my house, I was living with my friends that have a couple of kids and I was helping them. Oh, gosh. Okay. Okay. So, Chris, how old are you?

Starting point is 00:29:11 I am 37. Okay. All right. I mean, sometimes if you wake up from a nightmare and you're standing knee-deep in the swamp, the best thing to do is to return to the last time there was solid ground and retrace your steps. And so that would, in this case, sound like, get a job as an engineer and sell the house. Yeah. And then you would have their life back. Yeah, what prevents you from doing that in your mind? Yeah, I was interviewing for some engineering jobs in 2025. It was difficult to come back after taking seven years off,

Starting point is 00:29:51 and I also know that I'm not suited for a nine to five now, and I'm pursuing another career. Why are you not suited for a nine to five? What's wrong with you? That's a great question. Are you trying to say that you're entrepreneurial? Yeah, I believe so. You're suited for it.

Starting point is 00:30:10 You don't want to do it. Okay. I don't blame me for that. I don't blame you for that. I'm entrepreneurial too, and I wouldn't want to be trapped somewhere. I don't have an issue with that. So what we're saying is not suited for is not the right phrase. What we're saying is it's not preferable for you.

Starting point is 00:30:24 But right now, right now you're not really in a phase where you can do exactly what you prefer. Exactly. Preference is no longer a point. You're neck deep in quicksand. So I'm wondering if I do some numbers if you think I am in quicksand. So in 2024, I broke even. with my mortgage with the Airbnb, and then in 2025, I was negative $10,000 or $15,000 with my Airbnb. Is the Airbnb the only money?

Starting point is 00:30:56 Where does this sound like it's fun to you? None of this sounds fun to me. If this was a business unit at Ramsey, we would close the thing and call it failed. Yeah. I'm wondering if an alternative is Yeah, maybe Why are you reluctant to sell the house? You just don't want to get, you don't want to admit that this screwed up.

Starting point is 00:31:24 Yeah, I think I might be falling into sunk cost fallacy. Okay. Yeah, definitely, 100%. Tell us, tell us the property. Can you sell the house for as much as you owe on it? Yes, I believe so. put about $100,000 into it, renovating it. Oh, you lose that.

Starting point is 00:31:45 I mean, what were the house so forth? So I'm looking at Zillow and Redfin right now. I bought it for $6.50. Zillow saying $615, Redfin saying $5.80. Oh, so you're not going to get the money out of it. But you put $100 down or you put $100 in it after you bought it for $6.50? a hundred into it after buy you owe seven you have seven hundred fifty thousand dollars invested in a house that's worth six hundred dollars six hundred

Starting point is 00:32:15 thousand you know better than I did well I mean is that what you're telling me that I don't know if I got an appraisal if it would be worth more I'm guessing it would be okay but I mean you're telling me you paid six hundred and fifty thousand dollars for plus you put one hundred into it meaning you have seven hundred and fifty thousand in this house correct? Correct. And you don't think it's worth anywhere near that is what you're telling me. I don't know. Get a real estate agent. Go on our site. You need to go to Ramsey Solutions.com and just in the box type in real estate agent. It'll take you where you need to go. And you need to have somebody come out there. I have done that. Okay. And what did they say? What would they list it for

Starting point is 00:33:00 based on what they saw? I started doing that step and then I was like, I'm going to talk to Dave directly. Facts. And now I'm telling you, go do it, see it through, so you can see what the actual numbers are. You need to have numbers. Facts are your friends. You're in trauma. And you need to sell this thing if you can. And you need to retrace your steps and get back on solid ground. And then from there, think about how you can come up with some career choices after you're making a living again. How much money do you have in a bank in retirement? Or say, not retirement, non-retirement investments. Probably like about $10,000. Okay. Yeah, you've got to get a job, man. We'll send you find the work you're wired to do because I think you don't know what you want to do. And I think you're just kind of coasting and this idea that you might be an entrepreneur. I'm glad that that's so, but we need to get some beef around that and figure out what that's going to be.

Starting point is 00:33:56 In the meantime, yeah, we'll send you the book, but you also just need to get a job. Yeah. So the first thing you're suited to do is buy food. lights and water. The second thing you're suited well to do is pay your stinking bills. The third thing you're well suited to do after you've done those two things is find something that is a style of work that you enjoy, meaning entrepreneurial and more freewheeling than in a nine to five. But you don't really have a lot of choices right now, man, because you've done screwed this up. Hello. You've made a mess. And so you got to get to shovel out. The barn is full of

Starting point is 00:34:36 poop. Today is J-O-B. Yeah. There's some shoveling that needs to be done here. So you got a mess. Wow. So you do not get to, as an adult, boys and girls, ladies and gentlemen, do something that you saw on TikTok that feels.

Starting point is 00:35:06 fun or good or well-suited, whatever the phraseology we want to use is, when the mathematics around it don't math. 100%. That's called, you know, you can't. That's not a reality. The math does not form to your desires. No. The math does not form to your suited.

Starting point is 00:35:33 The math forms to the math. The math. When Sam and I were getting out of debt, we knew we wanted to start a business, but that takes time, right? You got to build it up. And so in the meantime, you have to work and you have to do the things that close the gap so that the math, maths, so you can continue to accomplish your goals financially while you accomplish your goals career-wise. You have to do it all at the same time. You can't just go, well, I want to be an actress or, well, I want to own a business, and I'm not going to do anything until I have that success. That's not real.

Starting point is 00:36:06 God designed me to be on the stage. Good. And in the meantime. That means you're also destined to wait tables. That's what that means. Every time. I mean, we're in Nashville. How do you get the next country music stars attention?

Starting point is 00:36:20 Waiter. That's exactly how you get it, right? Yes. And so, I mean, you know, there's calluses that are involved in these things, okay? Yes. You know, God designed me. I'm suited for. I'm good.

Starting point is 00:36:33 Me too. We all are wonderfully made. We have these, that's why we have finding the work you're wired to do that we're going to send to Chris. Okay, that's all great, but you don't get to use this specialness that card to try to violate mathematics. It just, it'll destroy your life. It's too harsh. It's mean out there, boys and girls, mean out there. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio.

Starting point is 00:37:13 I'm Dave Ramsey, your host, Jade Washa, Ramsey Personality, number one best-selling author and author of a brand new book that lands in stores today. What No One Tells You About Your Money, she's my co-host today. Open phones at AAA-8255-225. Luan is in Indianapolis. Hi, Luan. How are you? I am doing better than excellent, Mr. Dave.

Starting point is 00:37:38 How are you? Just the same. What's up? Well, I got kind of an interesting one for you. My husband and I run a construction company together. He started the business in 2018 before we met, which was 2021, engaged in 2022 and married in 2023. I help him with some aspects of the business, but I'm not totally 100.

Starting point is 00:38:04 100% full-time with it just yet. I still have a full-time job on the side. Not on the side. It's the main job for me, unfortunately. But right now, my current access in our bank's finances for the business is as a signer because the bank, I guess, needs me to be listed as an owner with a state, which wasn't a problem until recently. My husband wears many hats and doesn't need to take care of the minutia of running

Starting point is 00:38:33 a business like fixing business associate debit cards for our team members. So I went into the bank to help an associate with their debit card fix their pen, and I wasn't allowed to because I wasn't an owner. So I asked them what we needed to do. I needed a file through the state, all that fun stuff. We asked our CPA, got some advice on what to do, and he told us the things that we needed to do one of those things was we needed to assign business ownership percentage here's where my question comes in as a married couple following the biblical principles i said 50 50 because we are one flesh we do this thing together um and that's just where my mind and my heart was at my husband has his business what i call business glasses and hearing aids in so his his mindset was thinking business

Starting point is 00:39:28 and he came back with 51-49. And that didn't sit right with me. We talked about it. Something came up and we had to table it. And so my mind was kind of racing. I was emotional, and so I went to one of your podcast. Let me ask you this. Yeah.

Starting point is 00:39:47 Regardless of the percentage that's on the piece of paper, how will the two of you treat this business? we treat it as we both own it you're going to treat it as 50-50 regardless of what's on the paper I bet aren't you yeah I mean it's kind of what we do now I kind of think you do now I kind of think that's the way you're both you were in agreement until he went well that's a little weird

Starting point is 00:40:14 okay so I'll give you an example we have several LLCs that I own zero percent and Sharon owns all of it. Oh. In case some idiot decides that Dave Ramsey's got a target on his butt, and he finds an idiot lawyer to help him. Makes sense. And you know how much I'm worried about that?

Starting point is 00:40:39 About Sharon having 100% of it? Not at all, because I told her if she leaves, I'm going with her. Yes. That's what you're stuck together, period. That's it. So, I mean, I think the spirit of your marriage is really what matters in this discussion is what I'm saying. Right. And so I couldn't care less what's on the paper.

Starting point is 00:41:03 I think your 50-50 is the spirit. And when he said 51-49, it violated your spirit. It's like, what? More than you were actually worried about him, quote, being in charge. Because we all know he's not in charge. he's not doing the details you are you already covered that yeah and he knows that right but it's as if he wanted to own you know have that one little trump card somewhere in case he thought he could flex at some point ha ha that's funny but um you know i'm saying this is kind of

Starting point is 00:41:40 the way this went down am i missing something no it was more so like he's uh he's been married before so he understands things happen and so his mindset was sort of protective mode Yeah, it won't matter if $41.59. If things go down, he's going to have to take care of you anyway, and it's going to look suspiciously the same. And I had a feeling this was going to be the answer because I started thinking about it. It's like, it's splitting hairs because all I need to do is have some ownership to change debit cards. Yeah, you already had practical, spiritual.

Starting point is 00:42:20 ownership and for that matter legal because he would have had to deal with the asset if he owed 100% of it in the event of a divorce it's got to be on the plate it's up there to get cut in half just like everything else is just like his 401k has got his name on it if he works in corporate America but guess what you're going to take a big bite out of it in the event of a divorce the wife is hello right even though your name's not on it so that's the same exact thing so he's not You don't get clear of the worst-case scenario with this part of the discussion. You get clear of this part of the discussion with a pre-nup, if you want to go that way, or a post-nup in this case, which is really hairy.

Starting point is 00:43:01 So, no, I think as long as the two of you are in spirit, we own everything together, we're doing life together, we're going forward together. I don't care what the paper says. Right. And, I mean, does it really matter what the paper says? And the other thought was, in case something happens to him, continuing to let the business run smoothly, as a 1% owner, I could still do that. Yeah, but I'm 49%. Right now, on that LLC, I'm talking about if my wife passes away in a car wreck, I don't have any ownership in that.

Starting point is 00:43:36 Now, I have a will, and she has a will in an estate plan, it's instantly mine, and I've got control over it, but I don't have the bank. I've got to take documentation to the bank to start cash and check. I'm on the checking account, but I mean, if I wanted to close that thing down, I've got to, you know, I've got to bring documentation and death certificates and stuff now because I'm not even on the ownership of it at all. Right. So I've still got all that crap to deal with. It's just, it's just your worst case scenarios are always worst case scenarios.

Starting point is 00:44:05 So the big deal is, are we okay in our marriage relationship and are we aligned on how we view marital assets, that it's ours, as you said. And you clearly articulated that, Luanne, and beautifully, by the way, good job. So, I mean, do you have Sam and you have a business? We do. And there's things, especially now that I'm not part of it, that I'm not part of it. But I also know that if something happened to him, all of that, I would be able to have then have access to whatever it is, and it would be willed to me. And I know, like he said, 50, 50 in spirit. I think what really bothered you is what Dave said that. He said it in a technical way and it had you questioning if you guys view yourselves the same way. And I would just ask about

Starting point is 00:44:53 that. At that point, it's really not about the business. It's really not about the money or anything like that. It's just, hey, when you said that, that just, that hurt my feelings because I thought that we were 50-50 and it kind of made it feel like you were going for some power there. Ooh, good call. Yeah. It was kind of a flex. Yeah, it was a little flex. I had this before I had you. Sometimes she just got to flick it. Woo. Flick it back down.

Starting point is 00:45:16 Ooh. Oh. Ficious. Well, big news, guys. We mentioned it earlier. Jade Washaw's new book, what no one tells you about money is officially here. You get your copy at 24-9. 99 at Ramsey Solutions.com slash store.

Starting point is 00:45:44 Jade, what's this book about? This book is helping you diagnose the emotions that have been keeping you stuck running in the background that you didn't know we're there. Things like anger and guilt and shame and frustration. I'm going to help you diagnose it, call it out, and then I'm going to show you the way through it so you can finally use those emotions to help you instead of hold you back. Get your copy right now. Ramsey Solutions.com slash store or anywhere great books are sold. Becca is with us in Denver. Hi, Becca, how are you?

Starting point is 00:46:14 Hi, I'm good. How are you guys? Better than we deserve. What's up? I had a strategy question, so I am in Baby Step number Q. I am 35 single paying off a good amount of debt. And I had a question about my student loans. I'm about 46,500 in student loan debt.

Starting point is 00:46:36 But they're technically in forbearance. And I guess my question is, I've seen some horror stories of, you know, people opening up their student loan accounts and, oh, my gosh, they've doubled or whatever because of interest. But my question is, is it worth it to budget, you know, a specific amount to my student loans, even though I technically don't have a minimum on them right now and use whatever that amount could be towards, my credit card is my big focus right now. I get your concern, but you're not going to make any extra progress by doing that. You're going to slow down your progress as all. Yeah, yeah. The math is exactly the same. Actually, it's a little better if you pay it on the credit card because credit card is a higher interest rate.

Starting point is 00:47:30 So if your interest, let's say you were going to give $100 to the student loan and the interest rate on its 5%. And instead, you put the $100 on the credit. card and the interest on that's 24% well obviously the $100 you know you saved more interest by reducing the 24% account agreed yeah so it's it's mathematically incorrect to do what you're talking about but I'm not as worried about that as I am that I just want you to pound that credit card with viciousness yeah and then open up the smallest student loan and pound it with viciousness when you get to it, in the debt snowball. Yeah.

Starting point is 00:48:11 Yeah. I'm about, in total, in debt, I'm about 92,400 in debt. I have about 3,000 in medical from an ER visit. My credit card is at like 16.5. My car is at 26.6. What do you make? I work in ministry. I make about $76,000 a year.

Starting point is 00:48:36 You got an awfully expensive car. Mm-hmm. Yeah. Okay. Yeah. My car payment is like $5.43. Yeah. What's your car worth?

Starting point is 00:48:49 I'm not good with car stuff if I'm being honest with you. It's a 2021 infinity QX-50. That'd be my homework for you tonight is to go on Kelly Blue Book and see what it's worth. And if it's, you know, if you're not upside down or hardly upside down. Get a hoofty for a while and start pounding and not have a $500 car payment. for a while. I don't want you to drive junk the rest of your life, but I'd love for you to drive junk so you could get rid of the rest of this junk.

Starting point is 00:49:13 Because with that 543 back in your pocket, you'd be finished with that medical debt very quickly. Boom, boom, boom. And I have taken on because I am serious about my credit card debt. I actually have two other, with my full-time job. I actually have two other part-time jobs now. Good. Wow. Like at the grocery store, just, you know, doing some shopping,

Starting point is 00:49:35 and then I have friends who opened up a business. business, so I'm helping them on the weekend. Good. So every month, what are you bringing in? Do you know? Both part-time jobs, I actually just kind of started. I'm hoping between the both of them per month I can make like maybe like $500 at one per month and then $600 at the other just doing them on the weekend.

Starting point is 00:49:55 Yeah, that's good. Okay. So here's, you're not afraid of hard work and you're focusing on this. These are all really, really good signs that you're going to win, okay? And so what I'm trying to do is how quick can I plow through? What mathematical shovel can I use to shovel $92,000? That's what I'm looking at. And so if I do $30,000 a year, it's three years.

Starting point is 00:50:19 That's $2,500 a month. Okay. If I sold the car, it's two years. Right. And that's how my brain starts thinking, because I want to be free. Because if you didn't have a single payment in the world, including these student loans hanging over your head that you're not making payments on right now, but you're worried about building up.

Starting point is 00:50:42 But if you didn't have any of this in your background, your freedom in the spirit to do ministry would be completely different. Would you agree with me on that? Yeah, yeah. Yeah. I actually like the thinking behind that, and I want to double click on it. When you're looking at a high number of debt, like in your case, 92,000, some folks have 150,000.

Starting point is 00:51:03 Sam and I had 400, you know, 60,000. what you have to do is focus on that monthly number because it's overwhelming to say I have $92,000 of debt I need to pay off. But if you reverse engineer it and you've already done the math to say, if I pay $2,500 a month, I'm out in two years, then the only thing you need to focus on is $2,500 a month. I've got to make $1,500 a month. We've got $1,100 on the side job. Yeah, the extra is what I'm saying. And we've got $1,100 on the side job. So that means we only need out of our budget, X, and which means we might be able to do $3,500. Right, but that smaller number, that's a lot easier for your brain to break down and go after than 92,000. Do you see what I'm saying?

Starting point is 00:51:42 Yeah, yeah, yeah, for sure. So it's a much, it's easier to digest for you and then you can actually go for it. Then what we're going to do is we're going to get on a tight budget, increase income, which you've already done, the increase income part. We're going on beans and rice, rice and beans. We're going to list these debts regardless of interest rates, smallest to largest, pay minimum payments, which is what generated your call. on everything, nothing on the student loans right now, and cut up the credit cards, and we're going to attack that smallest debt, which is probably one of stupid little medical bills. We're going to pay off a whole bunch of those in month one, and then in month two,

Starting point is 00:52:16 we're going to start hammering this credit card like it's evil, and you're going to start seeing Samuel L. Jackson on the TV and start yelling at him, start yelling at him, what's in your wallet? My wallet's got cash in it. Hello? With my medical bills, with my medical bills, I'm actually, I'm not as well. worried with the medical bills because my employer actually, I have an HSA and they contribute to it very generously. So I kind of, not that I don't count it, of course I do, but I'm like, oh, that's another account that I, when the money comes in, then I just spend from that. When does the money come in?

Starting point is 00:52:50 I contribute to it monthly, and then they contribute a nice portion quarterly. Okay. All right. So we're still going to, we're going to take that free money, but we're not going to wait on it five years, okay? Right. So I still want you to clear those debts smallest to largest. So really, you get to screw around with this HOA stuff, HSA stuff, about three or four months. And after that, you need to just pay it off. Let's get it done.

Starting point is 00:53:18 Get it done. Yeah. I am worried about all this. I want it out of your life because I want you free, my friend. Yeah. Okay. We're going to set you up with every dollar, which will help you, the budgeting app. And it also helps you walk through.

Starting point is 00:53:31 It's not just budgeting anymore. It's got all the stuff in it now. And it's going to walk you through all the steps we're talking about. It's going to coach you along the way. It's very personalized now. It's very, the algorithm on it is incredible. And it's all, we're going to give it to you, okay? So you hang on, Becca, and Christian will pick up and get you signed up for every dollar.

Starting point is 00:53:49 And it's going to walk you through this whole process. So you're going to win because you're paying attention. Yes. You're not afraid of hard work. And you're learning new things you've never learned before. You've been victimized by these things. And instead, you're going to turn. around, put your thumb on the, put your foot on the neck of it and say, no more, no more,

Starting point is 00:54:04 we're done. And, you know, you've got to stand on the neck of the snake and say, you're done. You don't have a shot anymore, buddy. Absolutely. Absolutely. I like what you said about the, I keep thinking about that. When you're thinking about a grand total of debt, it helps so much to jump into every dollar and do the financial roadmap so you can see the snapshot with what I'm earning now. How long will it take? And it might show you. It might show you. you something like three or four years. And you get to say, that's too long. I'm going to add more money to it. And then when you get to a point where it's too long, I'm going to sell the car. Yes. Or it's too long. I'm going to have a garage sale. And reverse engineer it back. And then you can

Starting point is 00:54:42 focus on what are the three things I do to get that money. I sell the car. I do the garage sale. Instead of focusing on, you know, $200,000 at that. I'm stuck. I'm stuck. I'm stuck. Yeah. The way you eat an elephant is a bite at a time. It's exactly right. ABC News.com reporting the stock market recorded stellar year-end returns for 2025 when the market's closed before New Year's. Performance marked three straight years of double-digit gains. The S&P finished up the year up 16%. Jade, we often talk about around here how the only thing you hear on the news about the markets is bad news. That's right.

Starting point is 00:55:29 They never report good news. So let me give you the good news, okay? The stock market was up, the S&P, in 2023, 26%. The stock market was up in 2024, 25%. The stock market was up in 2025, 16%. That's a total of 67% in three years. That means three years ago, if you had $100,000 in your 401k, in a basic growth stock mutual fund.

Starting point is 00:56:01 If you've added nothing to it, you now have almost doubled it at 170. That's right. That's not on the news. No, and that's a lot of money. That you missed because you were watching the news, worrying about government shutdowns and tariffs and artificial intelligence bubbles,

Starting point is 00:56:23 whatever that is, and whatever else it is that you believe that you're going to watch bad news, for every day. So, meanwhile, I'm just the tortoise. I just keep investing every week, every day, every month. I just put a little more in, a little more in. And all these years, 65 years old, I've been doing that over and over and over.

Starting point is 00:56:49 Not worrying about what the news said. We've outlived the Internet. We've outlived Sirius XM radio. we've outlived Bill Donahue and Sally Jesse Raphael. That's a blast from the past. Wow. I'm trying to think of weird stuff from the past, yeah. And here we are.

Starting point is 00:57:11 And, you know, you just keep investing and you just keep living. And you keep – guys, you're not going to hear this on the news. Okay. The only thing you hear on the news is when the whole world's coming to an end, right? And what happened to the stock market when the president did so-and-so? or when he didn't do so-and-so, or when Iraq did so-and-so, or Iran did so-and-so, or name it, and it's in the news, and then, oh, the market, the market, the market, of 16% last year, 16%. That means if it had done half, if you have a mutual fund that sucks so bad that your mutual fund did half as good as the stock market, you still did three times what your high-yield savings would have done. It's a big deal.

Starting point is 00:57:59 Smoke on that for a second, okay? Hello? This is a big deal, y'all. This is why you start investing, you keep investing, and you don't stop investing, and if you need to turn off the news, it's not a bad idea. And this is also why you get started on the things we teach so you don't miss out on stuff like this, because the time is passing. You get your butt out of debt, so you get to take advantage of this.

Starting point is 00:58:19 The time is passing. Because, I mean, if you got a million dollars in there during this time, it's looking nice. That means you made $700,000. oh yeah in three years on your million sleeping if you got 10 million you just made seven million dollars on your 10 million in three years now is that a guarantee no is it going to happen in the next three years no but it explains why you're in such a good mood that and coffee yes I love it oh that's fun Tyler Tyler's with us in Toledo.

Starting point is 00:58:59 Hey, Tyler, what's up? Hey, thanks for taking my call. Sure. How can we help? So my fiancé and I kind of have a interesting situation, I guess. We've been working a side hustle for about two years now at our farm, and she's been the manager, and I kind of just, I get to do the fun stuff, sit on the tractor and drive around and pretend I can help him.

Starting point is 00:59:25 Well, so the previous owner passed away, and now the son owns it, and he's, you know, 18 hours away in Oklahoma. So he's trying to sell it to us. So it would be buying out the business and the house, and we've been looking at houses. I'm sorry, the business is what? A farm? It's a horse farm, so it would be a boarding facility. Are you going to get the land? Yep, we'd get the land, we get the house.

Starting point is 00:59:57 What is the land and the house worth? About three quarters of a million to $800,000. Okay. And what does this business profit? The profit right now is about $8,000 a month. Okay. All right. Okay, and what does he want to sell it for?

Starting point is 01:00:21 hasn't given us a hard number yet we're still in the financial stages the planning beginning stages of it right now but we're he's talking like 650 to 750 so he's going to sell you a 750,000 piece of real estate for 650,000 and give you a free business pretty much he just wants that that doesn't feel right why well he wants us to have it and wants us to run it and you know under his dad's legacy and all that good stuff and he's still got younger siblings in the area and um yeah so let me let me let me let me poke a second and make sure because when i hear something's too good to be true you know what the saying is right if something sounds too good to be true it's because it's too good to be true

Starting point is 01:01:12 yeah so is this land and house really worth this or you just wishing it was no that's i mean You know, that's what Zillow says. And that's what the last estimate was, I think, five years ago. Then that means there's something on the business side that's, well, I'm not saying this, but it feels like something on one of these sides isn't performing the way it seems. I mean, this guy really likes y'all. He really likes you. Like $400,000 likes you. That's what I'm saying.

Starting point is 01:01:49 Okay. Yeah, no, I hear what you're saying. Okay, so I really want to dig into this if I'm you guys, because if these numbers are all accurate, this is a sweet, sweet freaking deal. Okay. Now, how does he want to be paid? That's what we're trying to figure out right now, because we've been, you know, planning our lives. We're supposed to get married in September this year. Good.

Starting point is 01:02:17 And then we were planning on, you know, buy. in a house. Yeah, get married before you close this deal. If you're going to close this deal, get married before you close the deal. Now, the $8,000 a month profit, is that after you're paid and your wife is paid by the old man that died? That is after everybody's paid, all that good stuff. And what do you get paid? Well, right now I'm currently working for free board for my horse. What were you getting paid when the old man was alive? About $12 an hour, just for barn work. Okay, so in a month you would make, in a month you would make what?

Starting point is 01:03:01 We'll call it $500 a month. Nothing. Okay. And what is your wife being paid? Your fiancé to be wife being paid? She's making about $3,000 a month over there. Okay. So let's pretend for a second.

Starting point is 01:03:16 jeez that you gave uh almost all of the profits from the business after you all live on 30 if you live on 40 thousand dollars a year which is what you're making okay and you live on the property and and you give the hundred thousand dollars a year roughly to the sun and we're going to give you almost like 95% of the profit goes to you until we get to six would he do that deal? I guess that would be something I'd have to bring up with him, but I would think so. That'd be it take you about six years to work it out. You'd be able to make it $40,000 for six years,

Starting point is 01:03:58 and then the whole thing would be free and clear. Yeah, and I wouldn't quit my full-time job either. Oh, you have a full-time job. He sure does. Oh, yeah, I'm a bricklayer, so. Oh, I missed that part of the conversation because you didn't bring it up. Okay. Yeah, I didn't bring that.

Starting point is 01:04:13 This has been a side hustle for us. I got you. tractor for the fiancé's a side hustle. I got it. You know what? And I also think this deal, if he likes the sound of it, that's going to give you a good indicator if those profit numbers are right. But if he's like, I would never do that deal, then I definitely want to dig deeper. A percentage of profit after you make enough to live on. A healthy, like all the profit almost, until he gets his money and then he's done. And then if there's no profit, he don't get his money. Today's question of the day is brought to you by why refi when it feels like your private

Starting point is 01:04:57 student loans have buried your future. Why refi can dig you out? They can help you, that is, with low fixed rate refinancing and a clear path forward. Go to why refi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey, not in all states. Okay, today's question comes from Luke. in Arkansas. He says, how long is too long to save for a down payment on a house? We're expecting a baby soon and we'll go down to a one income once he arrives to purchase a modest but well built

Starting point is 01:05:29 home in our area. We would have to save over 120,000 as a down payment in order to qualify with one income. We're debt free, but it will take us years to get there. So there's a couple things that I'm thinking about here. When we teach the baby steps, baby step 3B is when you're saving for a down payment. And then after that comes baby step four where you're investing your 15 percent. And I think, Dave, what happens is people go, okay, I want to do 3B, but I don't want to sacrifice baby step four in the time in the market. Like we talked about the last segment. How do I kind of juggle that together? Because the truth is, obviously, if you have focus and you take all the money, you're going to put more money towards the down payment. But with a long

Starting point is 01:06:12 horizon like this, do you want to really go five, six years or whatever the time frame is and not invest? So I would probably split the difference. Probably once I got past the two, I would say two to three years. Is that what you would say? Two to three years is when I'd say, okay, no more putting every dollar to the down payment. Now I'm going to split it and I'm going to try to do some towards retirement, not miss out there. And I know that that's a sacrifice. We rarely say to do multiple things at one time, but in this case, it's all good. It's all good for you. I would. I do 100% towards the down payment for two to three years, and then you have to adjust after that if you haven't gotten there. But the other thing, Lucas, is this, you know, your income during that time is probably going to go up, your personal income.

Starting point is 01:06:57 Her income's going to disappear. Oh, wait a minute. Maybe we don't need to do that exactly that way if we want to buy a house. That's true. You can think through that. Maybe she needs to find some work at home type work, something that's flexible where she's home with the kid and does some work at home. well, a baby is sleeping and so forth. And so, yeah, we need an alternative where mom creates an income.

Starting point is 01:07:21 And that'll change the picture, too. And then, of course, also, you know, what you're saying is, here's the thing. You can't just yell at the sky and say, my wife's going to stay at home and we're going to buy a house. So be it. In our 20s. In our 20s. Happen. Yes.

Starting point is 01:07:45 It doesn't, you know, Shazam. It doesn't work, right? And so you are making a choice. And it's a good choice if you ask me to say, mom wants to be home with the baby. That's a fine choice. I would never shame you for that choice. But it is a factor in an equation. You just cut your freaking income in half.

Starting point is 01:08:10 That's right. And so you are deciding not to be able to afford a house as quickly because you're sacrificing one for the other. Or you could say the opposite of that, like a lot of ladies that work here at Ramsey, full time. I'm looking at several of them while I'm saying this, right? Jade, my daughter, Rachel, and, you know, Kelly across the glass and so on. You know, we have kids.

Starting point is 01:08:33 We are raising a family, and we are professional ladies. and you know we work around that and that's it's not only for money but it's also what you've chosen to do with your life okay uh it's also for money and so um i've noticed that we pay y'all and so that kind of stuff so it plays a big part it's for money hello so um you know and so i think that's the thing you can just decide that that's what you're going to do but by deciding that you're also deciding some other things that's right there's some unintended consequences or they should be actually intended consequences is my point. You say by definition, I'm going to choose to live in that neighborhood because we have one

Starting point is 01:09:19 income instead of this other neighborhood because we have one income or this other type of house or whatever, this nicer property, right? And by definition, we're going to have to buy something that's a little different to get our foot in the door to get started on this home ownership thing because we're choosing to do this on one income. And I don't think it's, It's a bad thing, but you don't get to just say, I do whatever I want and yell at the sky. You can't yell at the sky. It doesn't work. You know, you still have to, there's mathematics involved in all this.

Starting point is 01:09:51 And it's, you know, this idea that when money is one place, by definition, can't be another place. It's a fixed thing. It doesn't float around. It's not omnipotent. so hey guys speaking of homes buying or selling is a big deal the market is picking up i predict a robust spring right now we're sitting at about 5% just a little bit over 5% on a 15 year fixed rate the median house prices have been holding pretty steady right around that low 400,000 mark for quite a while now and with these interest rates ticking down we're about to see these

Starting point is 01:10:30 markets take off and so if you're thinking about buying a home this is a really good time to start getting your act together, get out of debt, have your emergency fund in place, and if you want to learn more about the housing market trends and get some free tools to help you with your buy and sell, and you're doing all that with confidence, go to ramsysolutions.com slash market, and we'll get you going. Julia is in Albuquerque, New Mexico. Hi, Julia. How are you?

Starting point is 01:10:57 Hi, doing good. How are you? Better than I deserve. What's up? All right. So my husband and I are starting Babyset 2 this month with $75,397 in debt. So when would it be most advantageous to refinance our balloon mortgage? Immediately.

Starting point is 01:11:17 That's a panic. When is the balloon to you? So the balloon is up in 2029. Jeez. So our current interest rate is 5.5%. Yeah. And if we refinanced now, that'll give us about 6.6%. No, I won't.

Starting point is 01:11:38 I just said just a moment ago, 15-year fixed right now is 5%. Really? Yeah. We've been watching, wow, we've been watching the, because we just budgeted everything, and we were Googling the interest rates, and it said 6.6. It's going to be between 5.5 and 5.08. Yeah, right now, it's hovering.

Starting point is 01:12:02 in the low five's for a 15 year fixed this week as you and I are talking now I don't know when people are going to be listening to this particular version of the podcast but yeah at the moment you and I are talking that's what we're looking at so call Churchill mortgage and talk to them about refinancing if you roll 100% of your refinance have you got a lot of equity yeah we have a 100 to 120 just roll your refinance costs in and nothing out of pocket okay and get rid of this balloon because this thing's hovering over your head and you're just inviting you're inviting an earthquake in your life okay you know you know you're ever heard the saying if anything can go wrong at will murphy's law yes as you approach this

Starting point is 01:12:44 balloon if you leave the balloon in place you increase the likelihood of job loss medical problems all these things that happen at exactly the wrong time screw up your income and keep you from being able to refinance and you lose the house okay that's what i don't want okay right now everything's sitting pretty and sassy let's not do a bunch of little half percent math and try to screw something up here let's get rid of this danger that you've signed up for in your life this is nightmarishly suicidal you've got to get this off your home before something happens and you're not able to right now while you can it's called get it while the getting's good right man that stuff's a balloon scare me to death can y'all tell

Starting point is 01:13:32 I hear the fear in my voice, it turns into anger. Yeah, oh, man, I can't stand it because these people get stuck and, you know, when we end up with them and financial counseling with one of our coaches is they're having to sit down because they are stuck and they lost a job or, you know, the sister got cancer or whatever. And they've got all these income problems and credit problems and stuff's popped up or some kind of identity theft thing, blew up their credit scores, taking them six months to get it fixed and they can't get refined. in the meantime. All this other crap happens just exactly at the time you're doing that. It's just a disaster. Oh, yucco, yucco, yucco, please act like your hair's on fire and get rid of that thing. Quick, quick, quick, quick, quick, quick, quick, you're scaring me. Welcome back to the Ramsey Show in the Fair Winds Credit Union studio.

Starting point is 01:14:30 Jade Washaw, Ramsey Personality, number one bestselling author, an author of a brand new book that hits the streets today called What No One Tells You About Money, the real key to getting unstuck from someone who's been there. You do need a copy of this book. It's available today anywhere great books are sold. John is in Los Angeles. Hey, John, how are you?

Starting point is 01:14:52 I'm doing good. How are you today? Better than I deserve. What's up? So, my situation, I'm trying to figure. out the practicality of purchasing a home in or around the Los Angeles area. It's very, very expensive. You think? I think I do relatively well, income-wise.

Starting point is 01:15:14 What do you do? What do you make? So this year I made $200,000. That's pretty good. Right around there. Yeah, but even with, you know, that relatively high income, it still feels a bit out of reach. In 2024, I paid off. all of mine and my wife's student loans were 100% debt-free.

Starting point is 01:15:35 Way to go. But, yeah, but that down payment still seems like a little far-fetched. And even if that has achieved the monthly mortgage payments, like, honestly, I mean, not regardless of the interest rate, but it's going to be a lot. Yeah. Because, you know, the fixer uppers out here run you about 850 or like 800 to 850. And that's no palis. Yeah, exactly.

Starting point is 01:16:01 It's definitely a fix rocker. And what do you do? I'm just trying to navigate. What do you do for a living? I am in sales for a large Fortune 10 company. Okay. Is it tied to Los Angeles? No, it's not.

Starting point is 01:16:20 Okay. So why Los Angeles? That's, well, sorry, let me, let me rephrase that. So my career is in Los Angeles. Angeles. I am a, I'm directly correlated with my territory out here. Oh, okay. Okay. That's what I was asking. Yeah. So it is tied to Los Angeles. Okay. Yes. Okay. Um, well, I don't think you're, the numbers that you're giving are wrong. I think you've, you've realistically assessed this. And it's kind of like, well, crap, I thought $200,000 a year was a lot of money. You know, it's like, golly, this doesn't, this is weird. And that's

Starting point is 01:16:56 the way it feels. It feels that way to me every time I hear it, and it's still the reality of the math is what you're giving me. And I think you, everything you said, I think was the truth. I don't think there was anything as exaggerated or fatalistic or anything there. So, you know, the thing is, how old are you guys? I'm 24. Okay. All right. That's good news. Okay. And the 200,000 includes your wife's income? No, she stays at home with a child. Okay. So it does include her income. Okay. Good. all right um the uh so that's your household income so you're doing really well man for 200k you're killing you um yeah so you got um two or three options or ways of looking at this and that is one you could say okay i'm in los angeles for a while this is my adventure probably not going to spend my life here and so if i rent for three or four years and see how the career thing goes that's not the other world and then you end up moving to a market that you can actually afford and hopefully you can make the same kind of money somewhere okay that's that's one thing that could happen okay another thing that could happen is you say okay I'm a scratching claw and I'm

Starting point is 01:18:05 gonna buy this little dinky house for 800 or 900 thousand dollars it's a fixer upper to at least get my foot in the door and then at least I own something right and at least then as as as prices go on up I get to ride the wave instead of being crushed by the wave right right so You sacrifice home ownership being like a dream come true. Instead, it's like barely getting in. And even still, you'll still have to embrace a bit of a timeline on this. Yeah. And just knowing that going in so you can set realistic expectations on both sides,

Starting point is 01:18:43 what you'll get for the money and how long it'll take you to get the money to get it. That's an okay strategy as well. It might be two or three years. That's not the end of the world. Yeah. It's not the end of the world, okay? Yeah. The other strategy, the other strategy is to start thinking about, okay, where do I want to live, where I can buy a piece of real estate?

Starting point is 01:19:02 Because I can't buy a piece of real estate in Los Angeles, because you literally live in one of the easily top five most expensive cities in the world. I mean, can you, just realistically speaking, I mean, you're making $200,000 between you and your wife, can you guys live on half that? Can you live on $100,000? Yeah, so we can. but the $200,000 I do want to specify is before taxes. And we're talking, I'm talking round numbers with you. I mean, if you start chunking somewhere around $100,000 away, though, you'd have $300,000 away in three years.

Starting point is 01:19:36 That's what she's saying. Yeah. Yeah. And I mean, we can live on half that. Because that's what you're looking at. I mean, I'm just, and again, I'm round numbering this. I'm just plugging it in. So I'm looking at it with you.

Starting point is 01:19:47 But if you commit to a three or four year journey on this and do what Dave said, I definitely think that's worth it. Because, again, you're getting your foot in the door and you're climbing, you're climbing the ladder at that point, the real estate ladder. And I don't think the L.A. real estate is bad. I think it's excellent. It's just really expensive. It's just really expensive. I mean, it's that simple. Yeah. And for sure. And also, like, my career is here. And I could see, like, a lot of positive career growth, like, in this area. Yeah. It's just kind of like that mental battle with, like, well, is it practical to stay? Yeah, but you're, yeah, it's practical to stay for a while.

Starting point is 01:20:22 It might not be your 10-year dream career, though. Yeah. You know, it might be. It's okay if it is. And if you've got a lot of growth and, you know, that's the other thing. If your career continues to hockey stick, I mean, dadgum, dude, you're 24, you're killing it to 200 grand. That's amazing. Yeah.

Starting point is 01:20:39 You're stud. Okay. So, I mean, what if you went to 300 and then 400? Well, these numbers all start to change real fast. Very quickly. Yeah, that's right. So I don't know what your comp schedule is or what this thing looks like on your career. but you're an impressive young dude.

Starting point is 01:20:54 I know that. I got to believe he's making more in three to four years from now. I think he is. And I think also that you've done a very dispassionate, logical, there's no shaking your fist at the sky. You're just looking at it for what it is.

Starting point is 01:21:08 I'm mad. This is not fair. There's none of that tone in what you're doing, which is the first clue that you're actually going to make it probably. Yeah, he was not very emotional. No, he was just speaking. There's no like, no, no, no, this isn't fair. It's like, you know, we get that a lot.

Starting point is 01:21:24 Yeah. You know, it's like, but I understand it's not fair, but I can't, you know, your feelings don't, the math, your math doesn't care about your feelings, you know, so that's the thing. So I think you're a sharp young dude. I think you're going to get there. And I would just sit right. I'd sit tight, start saving some money and just monitor your career and monitor the market and save like a crazy man and get your foot in the door.

Starting point is 01:21:48 And what you said just then is so, so true because, yeah, he wasn't, he wasn't a emotional he wasn't whining but a lot of people they do they look at the numbers and it feels overwhelming to them so they don't even start dave but if you just start putting aside or worse they ignore the math and go buy something that crushes even worse crushes him even worse because it's just not fair so homeownership's not reachable with reasonable ramsey's not right not reasonable oh crap they ain't going to do with ramsie just start you know it's got to do with you i've already got my house it's not going to do with me it's got something to do with you so what are you going to to do. Are you going to crush yourself because you had a little temper fit on the candy aisle

Starting point is 01:22:26 and buy something you can't afford? That drives me nuts. Please don't do that. He's the opposite end of the spectrum. This young stud is, he's got it going on now, like this guy. He's going to win. Mike's in San Diego. Hey, Mike, welcome to the Ramsey Show. Mike? I didn't push the button. Is that what you're saying?

Starting point is 01:23:07 All right. I didn't push the button. Thank you. Goodness, you'd think I know how to do this by now after 40 years. Hey, Mike. How are you? Hey, I'm doing great. How are you?

Starting point is 01:23:16 Well, I'm kind of challenged right now. But other than that, what's up? well um i had a question kind of honestly not kind of similar to the guy before but um i'm 25 years old um i live in san diego also work a job in software sales and about 18 months ago i started a side hustle that's kind of taken off of it and i'm really kind of looking for some guidance i guess from an entrepreneurial perspective on like when i should maybe consider doing that full time versus trying to rack up as much income as I can. Good for you. So what's it doing? How much you're making on the side hustle? So I started it in summer 2024. Didn't really do much the first

Starting point is 01:24:02 six months, maybe like $5,000 in profit. Last year we did $68,000 in profit. And then this year, I think we'll do about $100,000, maybe $120. What do you make at your day job? About $175. I'm in And so, thank you. I'm in software sales, so some years it's 150, some years it's 200. Yeah. It can just vary. Yeah. And so you're 25 and between the two, you're making 300 grand.

Starting point is 01:24:30 You're killing it, man. Thank you. Okay. So how much time does the side hustle take? That's the thing. Like, it takes me probably, I want to say 20 to 30 hours a week. My average day kind of looks like working on the business maybe from about 5 to 8 p.m. I'm fortunate enough to where I work remotely to where I can just kind of log off and start

Starting point is 01:24:53 working on that. Are you married? I'm engaged. Okay. Wow. Yeah. It's kind of ideal right now. I mean, you're just stacking cash.

Starting point is 01:25:04 Yeah, pretty much. I've been able to sock a good amount of money away. Yeah. If you worked double the hours, would you make double the money? Is it that cut and dry? Not exactly. So the business is very, um, online focus, like it's very dependent on Facebook, actually.

Starting point is 01:25:21 So essentially, what do you think the shelf life of the new business is? How long do you think it's going to last before some platform takes you out or a shift in technology or something? Yeah, that's a good question. Honestly, I'm pretty optimistic about Facebook and the way they're kind of investing. I would say that, I mean, conservatively 10 or 15 years, but, you know, who knows, right? I'm 100% 100% sure that Google and Facebook are going to do

Starting point is 01:25:54 one thing. Take care of Google and Facebook. Right. And they don't give a crap about you. I can promise you. Okay. So you need to be defensive about your platform usage

Starting point is 01:26:05 and don't think that they're on your team. Okay? Because about the time you get something figured out, they turn it and screw you. I mean, we've been playing with these guys for 15 years since they started. I mean, I've been doing it. from the time back when SEO was a thing, you know, and not even exist anymore.

Starting point is 01:26:22 So, you know, whatever, about the time you get it figured out, they figure out a way to monetize everything you've been doing, and then they flip it on you. So I'm not cynical. I'm just telling you, you need to be realistic about your platform life blood, and it ain't 15 years. I'm not going to, there's no way, not without you iterating substantially. Now, it doesn't mean you're going out of business, but you're not going to do it the way you're doing it, but probably 36 months, and then they're going to change something. So, okay, cool.

Starting point is 01:26:49 That's still awesome, man. Get off my entrepreneurial cynicism. But the, all right. Is there a reason to quit? No, I just feel that if I had more time and energy to put into the business, I could scale it non-linearly, if that makes sense. Yeah, it does. And I believe you.

Starting point is 01:27:16 I think you're right. we have a lot of systems in place that kind of run the business itself, but it is a volume game. Yeah, sure. So I think with more time and attention, I could get it to a point to where it's making more. Yeah, and then you'll hit the point of diminishing returns curve on their time as well. But I do think you could make what I think you could easily make, I don't even know what you're doing, okay? But it just sounds like the trend line on this. You could make what you're making now if you went full time.

Starting point is 01:27:43 Which I'm just curious on where your passion lies. did you start the side hustle out of money or I just really like this field. I want to see if I can do something in it and possibly make some money. Which one are you more passionate about? It's just honestly like a passion thing. Like it's actually adjacent to my career. So I'm actually doing the things that a lot of my clients are doing in my career side. And honestly, I just kind of listen to them talk about what they were doing right and what they were doing wrong.

Starting point is 01:28:11 And it kind of inspired me to do my own version of it. So if you jumped to what you'd be fulfilled. No, no. It's completely independent from what they're doing. It's just a variation of it. I got you. Just best practices, yeah. Okay. Pretty much, yeah. So, I mean, it kind of sounds like to you, like, I mean, it would be my dream to really be able to do it full time. That's awesome. I definitely understand. When are you getting married? Next year, like maybe 13, 14 months. What's she make? She is actually, I talked to her.

Starting point is 01:28:45 into helping me with the business about six months ago, which is why we saw such strong growth. Hmm. And so, is she doing that full time? Yeah. Oh, interesting. Yeah, so she was working as, like, a web designer. Uh-huh.

Starting point is 01:29:02 And I told her she wasn't, she was doing it like a contract freelance work, wasn't enjoying it too much. And I said, hey, I'm really time locked here with my job, but I really believe in this. and I think you have the skills. What could you hire someone to do what you're thinking about doing? What would it cost you in addition to her? I'm not sure.

Starting point is 01:29:23 I think that I've had experiences hiring people on Fiverr where they'll kind of take what you're doing and try to compete against you with it. I'm not sure we have the capital to go out and hire somebody like W2. Yeah, you do. You got 100 grand. Well, I was going to say, you paid yourself that. Did you pay her anything or that's part of the 100 grand?

Starting point is 01:29:43 Yeah, so right now we're. I'm basically splitting it, so she's getting 50, and then I pay myself 50 and kind of run the expenses out of that. All right. So I love where you are. I love what you're doing. I love the, you're thinking about it logically. I think you guys are a power couple.

Starting point is 01:30:01 So you're not, there's not a screw up. There's no, no, no, check the box in the stupid column here. None of that's going to happen, okay? It's only a question of what you want to do and what is best, all right? so one idea that popped into my head if I were sitting exactly where you are and I'm very entrepreneurial and I'd rather work for myself than anybody because I'm too contrary to work for somebody so one idea that popped in my head is let's just burn the midnight oil until we get married I love that idea and just crank this thing and see how high a stack of cash let's fill

Starting point is 01:30:37 a bedroom full of cash over there okay just make some money Okay. And during that time, you can start to see what some of the trend lines are and the platforms you're using. And if your prediction or my cynicism, which one is more accurate. And, you know, if you do that and you turn it on, you come back from the honeymoon and you just made 200 grand on this thing and you want to punt the day job and go on, then go on. And if the whole thing crashes in two or three years, you've got a bedroom full of money and you made some money and you could go do it again. You go do something else. because the beautiful thing about this is you can land like a cat on carpet when you're done because you've got the skills. Yeah, honestly, I love that idea. I've really been going back and forth between like I got a good job. I want to keep it. People tell me like it's a dream job, but also like I have to be passionate on the other hand.

Starting point is 01:31:29 I mean, you know how to do that job. It'll be waiting there if you ever want to go back to it. And you're at a great time of life where you can do exactly what Dave said. You're not married yet. You guys are in that time of adventure where it's like you want to go. I want to go, let's go do it. Let's scramble here. We'll eat peanut butter and jelly sand.

Starting point is 01:31:44 Like, we'll do whatever we need to do. Let's go crazy. Let's make hay while the sun shines, baby. You know, and, you know, after the marriage, quit. If you make a bunch of money, you know, I mean, you've got to be making about what you're making or more. But if you are, then quit. The downside of both of you doing this is if it goes sideways, your whole freaking deal goes

Starting point is 01:32:06 sideways. Your lack of diversification on your income base is a little scary, but it's okay. I think you've got the margin to handle all of it, and I think you're on top of it. Logan is with us in Louisville. Hi, Logan. How are you? Hi, Dave. I'm great. How are you doing? Better than I deserve. What's up? So I am 26 years old, and I bought my first house last May, whenever I was 25 years old. And I'm kind of realizing that I probably made a very big mistake because I bought it on a 30-year mortgage with 5% down at 6.5% interest. And I'm wondering what I should do. Okay. Is the home affordable? It is.

Starting point is 01:33:08 It was $220,000, and the mortgage is $16.23 a month. And what's your household income? I make $65,000 a year last year, and I work at a major auto factory in Louisville. Sure. And I will be eventually making $100,000 a year in about a year and a half or two years or so, according to our union contract. And so I'm basically wondering. I've never heard.

Starting point is 01:33:39 No, sir. I do live with my girlfriend, however, because she had to drop out of college. And her parents aren't really supporting her financially. And she didn't really have another option other than she had to either move in with me or it was be homeless. So I went ahead and moved her in. And so she has about $10,000 in student loan debt.

Starting point is 01:34:01 and then I additionally have about $12,000 on an auto loan. Okay. Well, there's no we. She has her life. You have your life. You're not married. And so you have $12,000 in a student. You have $12,000 car payment and you have a house payment that is tight right now.

Starting point is 01:34:18 Okay. So I don't think I would do anything. I think I'd sit right there. What I would do is as your income goes up and you need to clear this car debt off, when those two things happen and these interest rates continue to go down, I would just refinance. And when you refinance, put it on a 15. Okay.

Starting point is 01:34:35 But you're going to get down sub-fives probably this spring. Okay. So refinance the 15. When you can afford it. I don't know when your income is going to go up. You can't afford it right now. Correct. Yeah.

Starting point is 01:34:51 So when do you think you're going to be making the move from 60 towards 100? So we go up on a yearly basis. I'll be getting about a 10% raise in May. Okay. It's probably going to be the following May before you start talking about refinancing. You're probably in coast mode. Okay. And then I actually have a lot of in my retirement account,

Starting point is 01:35:15 and then I've got some in an index fund that's not in a retirement account. Pay off your car today. What's in the index fund? Almost 14,000. Pay off your car today. I'm wondering if I just go ahead and pay off the truck completely. Yes, today. Okay.

Starting point is 01:35:29 Okay, got it. I was thinking you were going to say that. Yeah, and then let's build our emergency fund. And as far as the house, we're going to sit with the 30 and we're going to sit with the six and a half until the rates drop and your income comes up and you can afford to refinance. And it's not going to kill you. We're talking about 18, 24 months here. And, you know, you'll be okay. Like you said, it isn't what I would have signed you up for, but you're there now and there's no, there's no panic in these numbers.

Starting point is 01:35:55 There's nothing here that's just destroying you or something. It's just a good lesson learned for next time you want to make a large purchase to wait until you're in a better position. And don't be combining finances with girlfriends, only with wives. Yes. Yes, I'm not even going to get into that. There were some things there. Yes, there were some things there. Some things there.

Starting point is 01:36:19 Britton is in San Antonio. Hi, Britton. How are you? How are you doing? Better than I deserve. How can I help? so I'm in a little bit of like a family pickle I I have a brokerage account that was gifted to me for college graduation that has about 13,000 in it but based off the previous gentleman you just told him the liquidate stuff and pay off the car today I have a $7,000 car loan for my wife's car I have a $25,000 car loan for my truck and I have about 40k at student loans putting us at about what's that $70,000. 75K human of debt.

Starting point is 01:36:58 Yep. And my gross income is about 100k a year. My wife and I have been married four years. We got a two-year-old, and we got a baby in March. Y'all are normal. And you figured out normal's not fun. No, I'm tired of thinking, oh, yeah, I make $100,000 a year. And I'm broke.

Starting point is 01:37:19 And I'm broke, yeah. Right, right. So, yeah. So you got your first piece of advice, which is, to liquidate that non-retirement savings that gets you the 13,000. So her car is paid off and you're able to put a little onto the truck. What does she drive? I'm just curious. She drives the 2019 Jetta that's, I don't know, probably got 70,000 miles on it.

Starting point is 01:37:45 It's in a really, really good shape. What about your truck? How good a shape is that in? It's in really good shape. It's a 24-sovarado. I bought it with 2,500 miles on it. with a little gift from her grandpa to really knock down my payment. I'll pay $500 a month for it.

Starting point is 01:38:02 Only $500. That's a lot. Yeah. I thought it was great for basically a brand new truck, but I mean, hindsight is 20. But I drive a lot for work, so I depreciate it. I've put on like $30.000 a dollar. It means you're destroying the value of a brand new truck. You are.

Starting point is 01:38:21 Listen, you're going to have to put the pedal to the metal on this debt. You have a great income, so that's good. but what's going to get you is these 40,000 of student loans. It's easy to let that sit around and collect dust. But this is the time, you know, to kick it up into high gear. I want you and your wife to get into every dollar. Have you jumped in there yet? I have not jumped into every dollar, but we used like rocket money

Starting point is 01:38:46 and we sat down and did our financial planning for the year. Well, there's a problem right there. I'm playing with you, but I'm going to give you a budgeting app that's actually going to help you, and it's not going to sell you debt products along the way. So Christian will pick up and make sure that you get every dollar. And I mean it. I'm not just trying to be funny towards a competitor.

Starting point is 01:39:03 I'm saying that if you go into every dollar, their goal is to get you out of debt. Yes, ma'am. The other budget you're using, that's not their goal. Their goal is just to keep you around as a customer later. They can sell you debt. We want to get you out. And therefore, in the app,

Starting point is 01:39:17 it's going to ask you things about your life. And you're going to be able to plug that in. And then it's going to walk with you. You called into us to talk to us for a hot two or three minutes. it's going to give you the advice we would give you step by step along the way so that you stay focused and actually get this done. Very good. Bobby is in Pittsburgh.

Starting point is 01:39:34 Hey, Bobby, what's up? Hey, how you all doing? Great, man. How can we help? I have a weird question. I haven't heard before on your show. I have a minor son who received a $15,000 settlement from an accident he was in. And I'm court-ordered to put it into a,

Starting point is 01:39:55 a federally insured bank until he reaches majority which is in 12 years and I'm struggling to pick where to put it because returns are trash Yep and Which means the court is stupid And the court generally is stupid

Starting point is 01:40:11 It's what happens when lawyers do financial planning Lawyers that become judges that are stupid That I mentioned this is stupid But you're still court ordered You're court ordered It's aggravating this crud Yeah, you can't do what you should do with it, which is put it in a decent growth stock mutual fund. That's terrible.

Starting point is 01:40:30 You can't do it. So you're going to be in a high-yield, you're going to be a high-yield savings account at your local credit union or bank that's got federal insurance, and you're barely going to keep up with inflation. Exactly. I mean, everything I'm seeing is like one less than one percent. Oh, no, no, no. You can get three right now. Yeah. You can get some high-yield savings up around two, two and a half or three.

Starting point is 01:40:50 But it's still a crime. It's still a crime. crime. It's still a crime, but, I mean, the whole thing was this kid got hurt and somebody's trying to take care of him here, and then the judge is an idiot. So, yeah. Well, I mean, the good thing is he currently have, we have some sizable money for him and our daughter currently, but it would be really nice to add this to it. Yeah, I would. Yeah, I would. Is there a way, I'm just asking, is there a way that you could get a lawyer in order to change that? Yeah, but I'm not sure. I mean, if you went from two to ten, or two to twelve, okay, you make, 10% make 1,500 bucks, I won't pay the lawyer. So it's not worth

Starting point is 01:41:27 it. It's just the stupid law. I mean, it's not even the law. It's just a judge that doesn't know what the crap they're doing. They thought you were, they thought you were going to take it to Vegas and put it on red. Let it run. Yeah, run it. Run it. That's what they thought. But, you know, nah, that's sad. Yeah. You're just going to have some money parked

Starting point is 01:41:45 there and kids going to have 15 grand. It's not going to grow much. Proverbs 14, 15 says the simple believe anything, but the prudent give thought to their steps. Albert Einstein said, we cannot solve our problems with the same thinking we used to create them. there we go Anthony is in Orlando hi Anthony how are you good how are you better than I deserve what's up all right so I came to ask you about a financial decision I'm going to make so me and my fiance are having a baby together and the baby comes here in two months and she currently has a car payment that is 26 grand and it's roughly $800 or more a month and we're deciding whether

Starting point is 01:43:06 to try to refinance it and I looked it up and everything and looked into it a little bit more and it's that she says she owes around only 17 for the car and then the rest is mainly like dealership fees and coverages and stuff and um i was wondering if it would be necessarily a good idea that refinance it and then just attack it and pay it off yeah what do you make sir um i make roughly 30 grand a year what does she make sure um i'd say maybe like 18, 20 a year. Okay. All right.

Starting point is 01:43:52 And you guys are 24? 23, yes, sir. 23. Close. Okay. All right. Can I love you enough to tell you the whole thing? Will you allow me to do that? Yeah. Okay. If I were your age or you were my son, who's 20,

Starting point is 01:44:15 who's older than 23. Now, and you were to ask me this question, here's what I would tell you to do, okay, in detail. And there's a lot of reasons for this, and I'll give you the reasons too, okay? But the first thing I would do is get married by Friday, okay? Because you don't need to be doing financial transactions and babies with people you're not married to.

Starting point is 01:44:41 It does not lead to prosperity and does not lead to, a wonderful life the data on this there's piles of research that show that that this is a really really good suggestion okay so so I'm meddling in your business okay I want you to get things in the right order from this point forward so get married by Friday and then sell the car you can't afford the car you can't afford the car you guys don't have any money you don't make much money and you have a brand new baby coming and you're so broke you can't see with an $800 payment yeah it's killing you isn't it man yeah you got to sell this car so call or have her call and get the payoff number on the car what it takes to pay it off

Starting point is 01:45:37 today and then find out what the um kelly blue book value of the car is and i hope you can sell it for enough to get out of it. I hope she's not upside down in it. And for that matter, since you're her new husband by Friday, hope you're not upside down in it because you're going to be joining this party. But you guys got to, this thing is a weight around your neck during what should be with a baby on the way in a new marriage, the happiest time of your life. This car is a nightmare.

Starting point is 01:46:08 And there's refinancing. It doesn't get rid of it. It's got to go away. And then get you the cheapest son. thing that you can drive that will run and start your life off like broke people like I did and Sharon did and Jay did and Sam did and most of people listening did that's where that song we ain't got money honey but we got love that's where that comes from okay and um you know and so you know you start with that and then you start working on your careers and both of you get

Starting point is 01:46:40 your incomes up because both of your job sucks and let's get our incomes moving and then we start talking about buying a little better car, a little better car, but we're doing this as a couple with a new baby. That's a wonderful gift. And let's move forward. And those are the things that will cause you prosperity. There's a whole piece of literature out there, folks,

Starting point is 01:47:05 a whole piece of research out there that has done multiple times and multiple different veins that talks about what's called the marriage advantage. And for instance, males live seven to nine years longer that are married than unmarried males, just an advantage. Females live on average five years longer that are married. So that's the physical, one of the physical aspects of it. People survive cancer at a 20% higher rate that are married. Isn't that weird? okay there's all kinds of data out there on this stuff the net worth of someone in their

Starting point is 01:47:49 mid 30s at 35 years old this is not me talking to you anthony this is me talking to everybody out there the net worth of someone in their mid 30s right now is 10 to 11 times higher for a married male than an unmarried male at 35 years old that's at 35 years old it's crazy you y'all. And it's got to do with a lot of different factors, you know, but one of them is, is that we're joined and we're committed. And we're not got one foot in a boat, one foot on the dock. And it changes the dynamic of how you do your career, of how you do relationships, of how you do money, and it changes the whole thing. And so you're always going to get that at Ramsey, by the way. We're always going to be proponents. We're going to tell you every time, because we love you, to get married. Yeah, that makes sense. There's a lot of research out about the quality of your relationships and how they affect your longevity, how they affect your mental health. It only makes sense that it would affect your money in a similar way. Absolutely.

Starting point is 01:48:53 It affects it dramatically. It affects your income. Absolutely. Absolutely. Oh, man. The amount of money that a lady makes more that is married in her 30s than an unmarried lady, really wild. That's very interesting. The interesting dynamic of that is, is that sometimes the unmarried lady is saying, I want to be independent.

Starting point is 01:49:15 Isn't it? Yeah, sure. And yet it ends up on average making considerably less on average. So I don't know exactly what that is. And the guys make more, too, by the way. It's not, it's not, but it's just, it's a dynamic in our culture and the way people's neuroscience work and where our relationships work. And then it plays out in the math. that's what it comes down to.

Starting point is 01:49:40 So that would be my advice to you, sir. Since you allowed me to love you and be direct, I'd be married by Friday, I'd get this car on the market and get it sold, and both of you look for better jobs. And let's get you up there where you're making a little bit more than $40,000 or $50,000 a year between the two of you, below average household income and a baby on the way.

Starting point is 01:50:03 So let's get this thing moving, buddy. You can do this. You're not a dumb guy. You can do it. and you're not afraid of hard work either. So you can do this. And you called a show like this. So I know you can do it.

Starting point is 01:50:14 They're just getting started. They can do it. Yeah, absolutely. They can do this. And so there's great hope. And guess what? If you've done anything out there that you wished you hadn't done, bought a house, bought a car, you know, whatever it is you wished you hadn't done, you know,

Starting point is 01:50:31 a lot of it can be undone. Yeah. Or a lot of it can be survived. Just don't keep repeating it. So I have about. decided at my age since I'm old now that people say well you're wise and I'm saying yeah you know where wisdom comes from bad judgment yes and doing stupid doing stupid but stuff and I the only thing I have done right is I seldom do the same stupid thing I find new ones to do but I seldom do the same

Starting point is 01:50:57 stupid thing and if you get a whole bunch of stupid things in your past that you never do again then people start calling you wise yeah and so that that's really what it comes down to a whole bunch are things I avoid doing now that all of a sudden it makes you look like you're smart. It's a success thing. You're standing on a pile of failures. Exactly. It's exactly what it is. Good point. That puts us out 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.

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