The Ramsey Show - App - The Solution to Your Problems Is the Person in the Mirror

Episode Date: October 10, 2024

From the Ramsey Network, it's the Ramsey Show. I'm your host, Jade Warshaw. Next to me is George Campbell. We've got a rowdy studio audience over there behind the glass. If you don't know, you can actually come here to Ramsey Solutions, watch the show live. A lot of people choose to do that, and we're happy that they do. If you're not here live, you can call in. The number is 888-825-5225, and we'll get you on the line. We've got the incredible Christian over there screening the calls, making sure

you're not a psycho, but we don't think that you are. So let's go straight to the phone lines. We've got Lily, who's in New York, New York. What's up, Lily? Hi, thanks for taking my call. I'm calling because I want to know your guys' opinions on me taking a second consolidation loan out for my boyfriend's credit card debt. Ooh, it's not even for you. It was like three bad decisions wrapped up in one. How did we get here? So I've been with my boyfriend for about two years. And when we met,

when we met, he was making a good income. I was making good income. Um, he, I guess, didn't really understand credit cards. I'm a credit card person. And I know you guys hate that term, but I really am. I've never been in debt. I'm the one person that's able to like reap the benefits, not pay the interest. But my boyfriend has taught me now why people are not credit card people. He didn't really understand, I guess, interest. And the first time around was about a year ago. I was hoping to move in with him, take an exit, but we wouldn't do that. He was about $20,000 in credit card debt.

Okay. And so I had an offer, 0% interest, 15 months, up to $20,000. I said, I don't need it. I'll take it. And I gave it to him. It was about $15,000. I took some for myself. Wait, you gave him the...

Hold on, hold on. Let me make sure I understand this. You took out the credit card in your name, but gave it to him to use. No, so it was a credit card loan. He had his own credit card, but I took out a consolidation loan for him because I was given an offer, like, to me to just take out X amount of money I need. But it's in your name. Yes, and it's mostly paid off, actually.

Okay, so help me explain where we're at now, because my thought is like, if you took out one and it didn't work, why are we taking out another one? And why isn't he doing this? Did he pay this off or almost pay it off, or is this you? The loan, he almost paid it off. It's about 90% paid off. The reason why we're here again is because he continued to use credit cards. And I mean, that can be my... Because we didn't change any of the habits. You bailed him out, like a government bailout. And then he went, more, please.

Listen, this is a red flag. It bothers me. There's a couple of things that bother me about this. A, that you're on the line and he's not that's the the raging thing the risk is all on you and then you're the one taking out yeah to george's point you're the one taking out the loans even though he's paying it the loan is in your name and you're saying hey you can do it like this um yeah it feels like you're kind of in charge and you're trying to mold him into who you want him to be financially.

And he's like, all right, you want me to do this? OK, I'll do it a little bit. And do you see that? Yeah, I definitely do. And that's something I plan to do. I think that's probably what happened the first time. At this point, you know, he's $30,000 in immediate debt, if not more. Oh, so we went from $20,000, paid it almost off, and now we're at $30,000?

Yes. Okay. And what's he spending it on? Does he not have a job? What's going on? No, so he takes home about, you know, he makes $80,000 before taxes. So his take-home pay is about $43,000 a month. And we did the math.

We did the numbers we just moved in together and um i didn't know he was back in debt until we after we moved in together so um i would have not have done that but what type of work does he do and what type of work do you do because you guys are living in new york city i want to see it yeah if you're living in new york city it better be like suits like you got to have a reason to be there. Right. Right. So we were both born here and raised.

He is a junior project manager in the city. And he makes pretty good. And then I am, I do have a couple of jobs. I'm a teacher's assistant and then I'm a bartender and I have a lot of side jobs. I take home about $4,500 a month after taxes and everything. And like I said, his take home after tax is about $43 a month. Okay. So here's the short end of the conversation. And then we can go back and trace back how we got there.

You guys are living together. That's your choice. You're living in New York City, which feels too big for your britches for the jobs that you're doing. But that's also your choice. Going forward, what I would not do in your shoes or in his shoes is I would not combine my money with this person. That's A1. And I would not put my neck on the line to get them out of debt because there's not a true, true commitment there. And there's certainly no legality there to protect either of you. And so I would keep this. I would would not if you're going to choose to live together

that's your choice i might say something different and i would say something different i'd ask well why don't you just get married but if you're not going to get married at the very least keep your money separate because he's getting himself into this mess and he has a habit of spending more than he makes he spends all that he gets and then some, and he's not really interested in doing anything about it. George, she seems like to be the only person who's interested in getting him out of that, which again is the red flag. Yeah, you care more about it than he does. And at this point it's enabling. Would you agree?

Yeah. I mean, I would agree, which is why I came to my breaking point recently. Well, it sounds like you've made an ultimatum like, hey, we're not going to move this relationship forward unless you get out of debt. Yes. But then you moved in with him. Right. So you took back your words.

It was after. I found out after. Okay. So it was, there's another part of this, which is like, I found out. So it was kind of a secret that he was going back into debt. Am I hearing that right? Breaks the trust in the relationship.

He wasn't taking it seriously. Yeah, no, it was, that was bad. I agree. And he acknowledges like that was not okay. Yeah. Do you have any debt? Sort of pushing it on. No, I don't.

I have maybe 10,000 to the loans, but that's not accruing interest. Okay. So trick question. Number one, you do because you took out the credit card loan in your name, plus you still have the student loans. So you've got your own financial goals and we're trying to babysit this guy into doing the right things financially. So I feel like we got to get our ducks in a row and you go, dude, you live your life. We're not going to combine finances. You want to take this seriously let me know at this point this relationship is at a standstill yeah lily we have a studio audience here and they're listening and i kind of want to know because based on what you're telling me if you were my best girlfriend i'd be like man it

might be time to kick this guy to the curb and i want to know what they think by a show of thumbs up or thumbs down they did the gladiator thumbs they think by a show of thumbs up or thumbs down they did the gladiator thumbs there there's a lot of thumbs up over here lily because we are seeing a woman who's trying to move forward we're seeing a woman who understands what she needs to do in life and it's almost like you're being more of a mom to him than a a lady friend you know what i'm saying like you're taking care of him you're're helping him to do. And don't get me wrong. There is a, there is part of a relationship

where you are helping each other and you're teaching each other. But this feels a little bit more. You're going in opposite directions. And so that's what worries me. So I would, I would have a real hard conversation and I would always,

I would also go, I'm never letting anyone loan. I'm never loaning money to anyone ever again. No, at the very least, I would not be living with this guy at the very least, because that for you, that's your leverage to say, Hey, I have goals and there's some things I want to do. And I'd love for us to be on the same track and going in the same direction with our money. I'd love one day for us to be able to combine our lives and get married, but you're not doing your side of it. And I can't move in with you right now. Yeah. You're one step away from paying this guy's bills because he goes, oh man, can you front my rent? I'll Venmo you next

month. I promise. Yeah. Don't like that. Yeah. Don't, don't give away your leverage. Um, yeah, I want to, what's that, that they say, George, uh, no one's going to buy the cow if they can get the milk for free. Oh, yeah. I know. I just turned into my grandmother. This is The Ramsey Show. Hey, you guys.

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New Jersey. What's going on, Lee? Yeah, hi. I listen to you guys all the time. I really love your show. And I wanted to call because my husband and I have some credit card debt and we're debating about whether we want to transfer the balances of those credit cards to different credit cards for a 0% interest while we pay it down. How much is the credit card debt? We have one card that has about $20,000 on it, and the other one has $12,000. Okay. And what's the current interest rate? Probably between both of them, somewhere between $27,000 and $29,000. Added pain and regret. That's what APR stands for. George, what do you think? So here's the deal. These are not inherently evil, these 0% balance transfers, but you got

to know what you're getting into and you got to know that it's not actually doing as much as you think. Most people do these transfers and think they've actually done something to get out of debt. But if you're already crazy gazelle intense, you've sold so much stuff, you're working extra, and you do this as one little move while keeping intensity, then it can be okay. But you're going to pay anywhere from 3% to 5% to make this transfer happen. So it's not free. It's going to cost you something, and it does not actually speed up your debt payoff if you're not already intense. So what makes you think you're going to pay off this $32,000 before the 0% is over? Or is this going to be a 0% card or what? Yeah, I would like to have both of them be a 0% card for anywhere from 18 to 21 months.

We already are paying probably close. I've already paid off my car. We're getting ready to pay off another smaller debt. Um, next week, um, my husband got a, um, pretty good pay raise. Okay, good. Um, so we're hoping that we can pay about a thousand a week to these credit cards, but getting them down to zero percent. Um, while we're doing that, we have two kids, we're still trying to maintain life, things like that. But we are getting very serious about paying off debt because we'd like to start saving more for our kids' college and for retirement.

So what's your total debt and what is your household income? So the credit cards are about $32,000. Our furniture is about $3,800. We do have a smaller annuity that my husband pays quarterly. That's about $6,500. And our mortgage is about $534. Okay, so let's ignore the mortgage for now. That'll be a baby step six item later on.

So you're looking at about, we'll call it $40,000 in debt. Right. I do have an $18,000 student loan, but it's eligible for forgiveness as soon as that goes through. When? What do you mean, as it goes through? through? Yeah. Like you've already paid the right amount of payments? Is this the PSLF? Yes, it's the public service loan forgiveness. I've already had a $200,000 loan forgiven. Good. Okay. And this is the remaining $18,000, which was a separate direct loan. And that is, I've been actively calling to see when

it's going to be forgiven. Unfortunately, I haven't been given a time. That's the one that's going to happen. But you've done your side. Yes. Okay. I have enough payments to be forgiven. And what's your household income? My growth income, my personal growth income before taxes, I work two jobs, um, is about 190,000. Wow. And my husband with his, with his, thank you, with his new job venture, it's a little bit on the wax and wane side. It's when he gets work, he gets paid well, when he doesn't, we kind of have to pinch our pennies.

What's a good month and what's a bad month? A good month is $5,000 a week before taxes. Okay. And a bad week is $2,000. A bad month is probably somewhere around $8,000 before taxes. Okay, well, that's not bad. He's feasting famine. But you guys are making hundreds of thousands of dollars, A bad month is probably somewhere around $8,000. Okay, well, that's not bad. He's feasting famine.

But you guys are making hundreds of thousands of dollars. So this debt should be paid off in a few months. Yeah, the consolidation at that point is truly negligible because this would be gone in under a year. What's keeping that from happening? Because to be making over $200,000, well over $200,000, and having $40,000 of debt, help me understand, because I'm thinking, okay, why aren't you just living? I mean, I know New Jersey is an expensive area,

but is there something I'm missing here? I'm just trying to get, I'm really at a point, I'm 39 years old. My husband's 41. We haven't done the best in saving throughout the years. Unfortunately, I've been with my husband for 17 years. You know, so I mean. Well, that doesn't really answer my question because you almost make $300,000. But do you see our point here? The balance transfer doesn't change any habits. And that's what worries me here. A couple making $300,000 shouldn't be needing to go to debt for furniture. They shouldn't be needing to swipe the credit card.

And so that's what I'm trying to figure out is what got us here and how are we stopping that part before we ever agree to this balance transfer. I have a feeling it's a budget thing. Can you tell us about that? It is. Okay. It is. Our budget is not exactly where I would like it to be, and we're starting to get a little stricter with how we spend our money.

Are you using every dollar? I have not yet. Okay. That's the key. We're going to give you every dollar because something tells me you guys are kind of a set it and forget it. I made a budget three months ago. It's in my head. We looked at our bank account.

Yeah. We should spend this much, and that's where every dollar is going to really help. budget three months ago kind of you know in my head we looked at our bank account yeah we should spend this much and that's where every dollar is going to really help mm-hmm is our george and i right a budget issue for us yes i agree um so we'll give you chris before we get off the line christian will pick up we'll give you every dollar and it's a budget that you make every single month and the good thing about every dollar is it kind of has this kind of copy paste feature where at the end of the month you copy it and then for for the next month, you just go through it and make whatever tweaks and changes you need for that month. But what George little bit more um you don't have a ton of debt in ratio to that but i think you're kind of in this what we would call messy middle where

your income is good and so your debt it's not like you know it's not on fire it's nothing's on fire right it's not the serial killer at the door it's just like all right this is moderately uncomfortable and so i think just a creeper out the window but he's down the street yeah that's kind of how it's like yeah your debt's a peeping tom it's it's not the analogy jade wanted to make but i'm i forced her to do it okay but do you see what we're saying here yes okay i want you to act like it's on fire because that's the only way you're going to get out of this thing in three months because i I think you guys are incredible. You work really hard, and you make too much to be this broke. Would you agree?

Yeah, live on $250. I agree. I agree. I am actively working to try to revamp our spending and our budget. Is he on board with that? It's expensive, so we're working on that. Is he like an anchor that's going to drag this down, or is he on board and he's going, I'm willing to do whatever it takes? No, he's resolved to letting me kind of like handle the financial part of this and whatever it is I need him to do, he's willing to do.

But he needs to be a part of this budget making because unless he sees it and he goes, oh my gosh, Lee, this is insane. We make so much money. Where is it going? He's not going to be willing to make the right sacrifices. And if it just becomes a, well, you do this, I do do this it's just going to become another to-do list for him and i want him to really feel this yeah i agree okay so we need to give you every dollar we probably also need to give you financial peace university for you and your husband to go through together um so that you can be on the same page and he can see that he's really an intricate part

of this equation just as important as you are and And you might be the, don't get me wrong. Usually there's one spouse that kind of takes a slight lead, right, George? You're probably the one who's going to be kind of plugging the numbers. There's a pilot and co-pilot. Yeah, pilot and co-pilot. I like that. But they both have to be in the cockpit paying attention. That's right. And not a passenger on the plane. That's right. Not a passenger. Oh, I agree. Very good analogies, George. I feel like. I had to redeem it after the peeping Tom one. Like owed you that you took me there. But the point is, a lot of you listening are probably still in that messy middle. Your income is good. And the debt is just at that point where it's not ruining your life yet. And you're still able to go

to Applebee's every Friday. You're still able to buy the new sneakers you want. But it's kind of that that creeper in the corner, and you see it, and now's the time to deal with it. Don't wait till it gets worse. We can help you today. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership

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All right, you're listening to The Ramsey Show. We're here on The Ramsey Network. It's myself and George Campbell today. Hey, that last call we just took was all about the budget. You know, it was a couple or a family. They're making $300,000, George. Making great money. But still feeling the weight of living paycheck to paycheck,

seemingly not able to pay off $40,000 of debt. And when I look at that, I mean, it's the budget every time. It's not being intentional. It's really not having a budget. You know, a lot of people think it's, I set it and forget it. We made it at the beginning of the year. Well, we have to define what a budget is because a lot of people think, well, Jade, I look at my credit card transactions.

That's like doing a budget. No, they're way off. I looked at my bank account. There was money left. I did a budget. No're way off i looked at my bank account there was money left i did a budget no it's not something in your head it's not your bank account it's not a credit card statement it's an actual budget like a budgeting app like every dollar that's right and so the way we teach george is we want people in there every single month you're starting with your income all of the income that comes into your household and there there's an area for you to put income in.

And then you go through and you're methodically thinking about every area throughout the month that you could spend money. And it's divided into categories. So, you know, it's like your lifestyle stuff. It's your utilities and home and your transportation. And you can customize it. But essentially, you're giving a assignment to every single dollar. And you're knowing on purpose, this is what I'm spending on,

even the extra money you're giving an assignment to, right? And that could be paying off debt, that could be going towards savings, that could be just, you know, miscellaneous, it could be a cushion, it could be, you know, grandma's birthday, whatever you decide, that's what every dollar is for. And so you're really making the most of your money. And the way you do that is by creating a budget, guys. Every dollar makes it so simple. They make it easy to plan spending. You can track expenses. You save for what matters most to you. And like George said, it's all in this easy app that is on your desktop computer or it fits in your pocket. So you can take it with you to the grocery store and your spouse, if you have one, has the exact same budget on their phone with the same login. It makes it that easy.

So if you don't have it, download at every dollar for free. You can do that in the app store or you can do it on Google Play or you can just click the link in the description if you're listening to this right now on YouTube or podcast. But the crux of this is we have found that people who manage their money well and people who have success with their money, they do it because they're on a budget so there's a direct correlation there um get a budget all right george let's get back to the phone lines we got vincent he's in fort lauderdale florida my neck of the woods what's going on vincent hello hello uh good morning good afternoon good afternoon what's the weather like oh uh you

know we didn't really get any issues over here from the storm. Praise be to the Lord. I heard it's sunny. I heard it's pretty sunny. Yeah. Sunny, warm, and beautiful. Love to hear it. I just want to say thank you for you guys taking the time to take my call.

And so I was actually watching George this morning on a video with Tom from Impact Something. Yeah, Tom Bilyeu, Impact Theory. Had a fun interview with him on my YouTube channel. Thanks for watching. Yeah, it Bilyeu, Compact Theory. Had a fun interview with him on my YouTube channel. Thanks for watching. Yeah, it was really good. Yeah, so my situation is a little different than the average American. I'm a 39-year-old, 100% disabled

veteran, single, no children, and so I have four times the expenses in the emergency fund. I don't have any debt, credit, currently renting, and so I'm not sure if I don't have any debt, great credit, currently renting. And so I'm not sure if like I'm in, you know, or like how vital step number four is because, you know, I have guaranteed tax-free income until I die, you know, which adjusts for the inflation.

Right now it's $3,737, so $3,700 a month. And of course, it adjusts inflation like, you know, like 10 years ago or, you know, like 13 years ago, it was like $2,700 a month. And of course, it adjusted inflation like 10 years ago, or 13 years ago it was like $2,700. So it's went up like a grand in 13 years. Do you know what the rate is yearly? Is it 4%? How does it go? That's the federal government. They make their decisions.

Supposedly it's going to go up like 2.5%, so that'll be like another $100. You just kind of follow the CPI and inflation rates and all that i i guess i'm not really sure to be honest with you i just know it it does it does make changes um and so i'm thinking like possibly i'm in step seven and so i'm like i'm really seeking advice and counsel for potential options and like paths to follow uh i'm considering buying a home. And like if I subtract my emergency fund, then that leaves me like $43,000 that I have in the bank. I don't have any investments. Everything is just savings. But my ultimate goal is to live in the Caribbean. So I'm still living in some islands. I got my eye on some, but like, you know,

I'm not sure if like maybe buy a property here, start here, then go there. I'd start here and then go there. I'd probably start here and go there. So you've never been a homeowner before. And so I'd probably want to learn that and get kind of your sea legs, for lack of a better term, under home ownership before you go abroad. But I love that. I think home purchase is a good thing for you. We say all the time here that, you know, your rent, it's the biggest line item on most people's budget and it's variable as long as you're a renter. And so being able to kind of stabilize that line item and have a mortgage and one day pay it off in your situation is huge. I do have a question and I mean, you're welcome to say, no, I don't want to talk about that or

whatever, but if you're 100% disabled, do you feel that there's any work that you'd want to do and could do? Oh, certainly. So, you know, each person is different. It's kind of like a different situation than the Social Security disability. Like with a veteran, it could be a variety of spectrums. But, yeah, like, you know, I am limited. I have situations that I'm dealing with. However, my ultimate goal is to continue doing something. Like I, I, you know, I'm with like with Dave, like, I think he would agree. Like I don't plan

to stop working until like I die. And then, you know, I mean, Jesus, you know what I'm saying? So I want to be doing something gainful with my time. I think it's, you know, good for your mind and good for community. And so I'm not sure what that's going to look like. I looked at maybe like teaching English or even like I went and visited an island and they pitched me being a tour guide because, you know, I can speak to English, English tourists. So I'm kind of like putting the, excuse me, to the feelers out there. I'm just really in this situation. Like, I don't know what to do as far as like financially and just want to see like what options you guys might suggest to me. And just so I can kind of like, um, have stuff to consider. I don't want you to take your foot off the gas. I would continue following the baby steps. And

that means investing 15% of your income. You need to look into what you can do with that income. If you need, you know, different earned income from working outside of your disability payments in order to invest in a Roth IRA, for example. But I would put you in this baby steps four through six. And, you know, baby step seven is really, hey, I've got a paid for house. I don't have payments in the world. I'm not trying to save up for a house. You've sort of already overcome that. So that would put you in this kind of long term journey of investing 15%, probably saving up for a house as well. You're maybe going to end up paying off that home. And that's only going to set you up for success later on down the road when you want to buy something in the Caribbean and you're on a fixed income.

And to George's point, I like continuing to work the baby steps. And when you are ready to buy a house, just remember your emergency fund isn't your down payment. So right now you said you've got four months of expenses. So, you know, for all intents and purposes, that is your emergency fund. So if you're ready to, if you are wanting to buy a property, you need to save up a separate down payment because I don't want you depleting that in order to make your home purchase. Yeah. Good. Yeah. I'm on the same page. You know, like Dave says, and you guys have said too, like, you know, stuff will happen,

the hot water heater will go, air conditioning or something. So I'm definitely on board with that. And like, I like that I've been listening and, you know, I didn't hear before about like doing, like you've recommended not using the VA loan if you can do it because, you know, there's more fees and stuff. And if you can put 20% down and do a 15 year mortgage, I'm like, wow, that's a really good idea. It's just a better loan product in general. Now there are some times, you know, you can waive the funding fee because you have the a hundred percent disability. It's not that it's a bad product. Just what tends to happen is people who have no money, they put zero down and they can

end up underwater on their home or they buy too much home because they have zero equity in this thing. So it's all mortgage. And so that's the part that's worrisome. But if you go to it and that's the right product for you and you can talk to our friends at Churchill Mortgage and they'll walk you through. Here's the AB of a 15 year versus the VA loan and what makes sense for you. But thank you for your service. What a sacrifice. I can't imagine what would necessitate 100% disability. So a lot of sacrifice. Thank you

so much. Yeah, George, you're right. You know, and speaking of Churchill, I was talking with them the other day and, you know, because of the Fed lowering interest rates, even though home interest rates aren't really being affected by that just yet, a lot of people are still looking at refinancing and is it time and is it this? And talking to the guys over at Churchill, they're like, the time is to make a plan. So it's always good to call up Churchill and start talking with someone and say, here's where I'm at and here's what my goals are. And they can help you walk through that process and figure out, OK, what does it make sense for you to do? If your goal is to refinance, if your goal is to buy a house, it's like, it's never too early to call them up, make a plan.

To get prepared. Because they're all about relationships. They want to build a relationship with you. They want to get to know you. They want to get to know all of the factors that are surrounding your home owning or home selling or whatever refinance situation. Even if it's a year or three away. That's right. At least you know what to do in the meantime. Exactly. And it gives you time to actually start working a plan towards that. So contact our friends at Churchill. This is The Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all.

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Give them a call at 800-356-4282. We're here on the Ramsey Network. I'm Jade Warshaw. Next to me is bestselling author George Camel, author of the book Breaking Free from Broke. If you haven't gotten a copy, make sure you do because it's litty. All right, let's go to the phone lines. We've got Jacqueline in Austin, Texas. What's going on, Jacqueline? Hey, thank y'all for taking my call. You bet. How can we help?

We are on baby step number two, and we're working to pay $105,000 in debt. Okay. And we have 23,000 of that enrolled in a debt relief program. Okay. And there's been a settlement reached with one of the creditors, of course, after they rightfully so threatened to sue. Yeah. And then the other one is still being negotiated.

So my question is with all the other debt that we have, is it wise to try to get out from underneath this program? I mean, what made you go into it to begin with? It's kind of odd to me that you had $102,000, but you kind of chose this subset to turn over to them. Can you tell me more about what caused you to do that? It was out of desperation in the time for just because the interest rates were so high and I just wasn't, I was not very wise about the decision at all. Were they already late? Like were you already behind on them? Yes.

Okay. Let me summarize what happened and you tell me if it's correct. So you reach out to the company, and they tell you, hey, stop making payments on all of your debt. Let it go to collections. Let them sue you. Instead, you make those payments to us, and then we'll help settle with the creditors for a lower amount.

That's pretty much how it's happening. I didn't know about the suing part. Yeah. They tend to leave that part out in the pitch, in the brochure. Hey, we're going to implode your financial life, tank your credit, have people coming after you to sue you, but it's going to be awesome. And we'll handle it. And they don't actually help you learn how to manage your money.

So they're just middlemen that are unnecessary, and for those reasons I would get out of this agreement because I think you are way more in control than you think. And I wouldn't let it to a middleman to implode your financial life to help. What's it going to take to get out of it? And what have you paid to them so far? Quite a bit. They've already made a settlement and I'm about $2,500 in on those payments. I have about $1,500 in a savings account with them because that's, you know, you make the payments, they put it in this account. And then that's what they use to make payments back to the creditors.

And I can take that out. I mean, they said I can get out at any time. I am just not aware of any hidden fees that they may have because I didn't save any money we need to find out....really I didn't save any money at all. Yeah, you'll need to ask them about that. But I'm hoping you can get out without much penalty and fee and move on and do this yourself using the debt snowball method with Gazelle Intensity, using the baby steps. That's the way people actually get out of debt.

And so that's your homework. Your homework is to go and figure out what's it going to take to get out of this. You said you've paid $2,500 in, which on $23,000 of debt isn't much. It sounds like you're still in the beginning process of this. You said they made a settlement. Did they tell you how much the settlement was for? Is it for the lump sum or just an individual one in there? It's for the lump sum, but it saved me maybe $3,000. Not very much, but then with all their fees, I ended up not saving any money at all. Exactly. But it makes you feel like, well, this still saved me money and hassle. But listen, you can negotiate this stuff yourself. If you've

got debt and collections, you can call them. You can say, hey, I want to settle. I have two grand. Will you settle on the six? Call it paid in full. And so if you do have debt and collections, you can do this yourself. The rest of the debts stay current and attack them with a vengeance using the debt snowball method. Okay. Yep. That's what we're working on. All right. And I just didn't want to do any more of this with this. Yeah. I wouldn't go down this road any further. You turn. Thanks for the call. Yeah. George, we never recommend debt relief programs, debt consolidation. They're charging you to do what you can do for yourself. Well, they market to you like Ramsey would.

They're like, we're going to give you financial freedom and we're going to help you get out of debt. Except we know the solution is the person in the mirror. That's right. Not some middleman who's going to take your payments while imploding your financial life. That's what they do. Yeah. Don't make payments. Let it go to collections because then when it's in collections, now we have the ability to settle. Yeah. And trust me, I do not care about a credit score, but I don't want you to tank your credit score. On purpose. That will hurt you financially to have a bad score. That's right. Yeah, we would never tell you to do that on purpose. All right, let's go to Ray in Columbus, Ohio. What's going on, Ray? Hi. Hey, what's up? So my question is, is how do I begin to pay down this debt that I have with the low income that I make? Okay. So tell us what your debt is and tell us what your income is.

Okay. So total debt is about $30,000 and monthly I bring home after taxes,000. And monthly, I bring home after taxes, $1,200. Ooh, what are you doing for work? I work at a gym. And I'm only part-time currently. And basically, speaking to my boss, he tells me he doesn't have the hours to allow me to work full-time. Okay, so why don't you go ahead, George. I'm just wondering, are you getting paid hourly? Yes. And what are you making hourly? $16, George. I'm just wondering, are you getting paid hourly? Yes. And what are you making hourly?

$16. So could you not find a job that's full-time paying $16 or $17 or $18 or $20 or $25? Unfortunately, jobs are not really hiring. You know, I've put in tons and tons of applications for lots of places, and this will only work Ray, we're heading into the biggest shopping season of the year you're telling me no retailers are hiring yeah i mean you checked them all you checked them all every single one you went to every retailer in your city well you're telling me there's no jobs you just said there's no job we're looking you're looking

okay we're looking for another job we We're pushing on you, Ray. But right now, as far as the applications I put in, I'm not hearing anything. I just think Ray's worth more than $1,200 a month. Would you agree? I agree. Yes. What is the most you have made? Tell us.

When you were doing, if you had a moment where you're like, yeah, I was doing well. Yeah, my previous job, job actually i ended up getting laid off because they just were having major budget budget issues and i was making about 50k that when i was working okay so what is your skill set here i'm sorry what what's the skill set what's your background it was manufacturing it was at a a factory do you have education in that field or did you just kind of fall into it i just fell into the job and started working there okay is it just you or do you have a family is there a spouse anything like that um i do i do have a son okay and then i my boyfriend and i do live together so what does child care look like? Child care, I do get like assistance for that, but I do pay a little bit monthly for that. How much do you pay monthly? Can I ask? Only $108. Okay. So you've got that. We wanted to know that because we want to know, are you freed up to be able to work full time? And it sounds like you are. Okay. At this point, you got to just get

like pound that pavement. That's the only, the only solution to this is income. I wish that there was a magic button, but there's just not in your situation. Income is your only thing. That's going to break you free. Luckily 30,000, you know, you can tackle that, but you got to be making it. Let's get back to the 50,,000 let's let that be kind of a goal point for us but the reason that George and I were were really pressing you on the income is because we know like like you can go to Walmart you can go to Wendy's you can like there's places that are paying 18 an hour and it's not um they're they're places that aren't hard to break through and so I think at this point you you've got to really raise what you're

calling a lot. I've applied to a lot of places. If in your mind a lot was eight, well, now a lot is going to be 30, right? And you're going to talk to people that you know and say, hey, I'm looking for a job. Are they hiring anybody where you're working? Do you know of anywhere that's hiring? So before you get off the line, we're going to give you Ken's book, Proximity Principle, because we want you to be having the tools to really get out there, we're going to give you Ken's book, Proximity Principle, because we want you to be having the tools to really get out there. We're going to give you the find the work you're wired to do, get clear career assessment so you can figure out what you want to do going forward. Because I think you're at a crossroads. Yeah.

And I think you're really. How old are you? I do 23. Yeah. Have you decided I'm not going to borrow any more money? Because it sounds like right now you're going into debt just to exist, just to survive. Well, so the debt is, it's like $17,000 from a car accident. Two of them are credit cards, but they're within $800, you know, each.

So one is $500 and then one is $800. And then more debt, it was like $8,500 was from a car that I had repossessed after I lost my job. And then $3,200 in student loans that I had coming back. Exactly. I think the lesson learned is no more debt. Because it works out as long as life's working out. And then life hits you and you go, oh boy, this isn't fun. Yeah, and the problem is being in this situation has the ability to really impede the decisions that you make.

And I don't want that for you. So keep hitting the pavement. You will find a job. It's just a matter of time. We believe in you. We believe you've got it. Stay in touch with us and see if there's anything we can do to help. This is The Ramsey Show.

From The Ramsey Network, It's the Ramsey show. I'm your host, Jade Warshaw, your other host for the days next to me, George camel. We'll be taking calls about your life and your money. You can get your call up on the line by calling 8, 8,

8, 8, 2, 5, 5, 2, 2, 5.

We'll screen you and try to get you in. But yeah, as long as you're calling to talk about your life and your money, you can even throw in a career question, you know, we'll help you out with that. Ken's usually the career guy, but you know you're calling to talk about your life and your money, you can even throw in a career question. We'll help you out with that. Ken's usually the career guy, but he talks to us during our lunch break. And so we have some information we can share. We've absorbed a lot of wisdom from our friend Ken.

His desk is right next to mine. All right, let's go straight to the phone lines where we've got Emma in Colorado Springs, Colorado. What's going on, Emma? Hi, Emma. I'm sorry. That's all right. Thank you so much for taking my call. So my question has to do with my dad wanting my husband and I to take a $60,000 loan. That's a parent plus loan he took when I went to college. Okay. And at the time, um, I, I never made a plan with him to pay it back.

He never said, you know, at this date, you're going to become responsible for this or anything like that. Um, I've been married three years now and we have wanted to help my dad. Um, cause obviously it was a helped me a lot um but I'm really really regretting that now um and I think like he never said anything when we got married or anything like that and I think he's just um he's had a lot of conflicts with my husband and it's the way I see it, it's like he's just frustrated with us. Oh, so you think this is for spite? I do, yes. How much can you tell us about the context of this resentment?

Was it because of financial choices? No. Or is he using this as leverage? I believe he's using it as leverage. I think if I were to say like, oh yeah, sorry, my husband is this, this and this, just like you say, then maybe he would be like, okay, just because for the past 12 years, he's been paying on this loan and has not ever mentioned it. So what does he not like about your husband? Where's the beef? Oh my. So I think in retrospect, so in the past I was really close with my dad and now I'm just processing all of these things that happened. I wonder if he has been maybe kind of enmeshed with me. Like in high school, he would tell me a lot of details about his own financial situation that I don't even know if he told my mom about. When he got the loan, when he got the Parent PLUS loan, he told me to not tell my older siblings about it.

Okay. And I'm the youngest of six kids. So what does this have to do with your husband? Yeah, you mentioned, you made it seem like it was kind of a yes yeah so he thinks that um that he's been a very bad influence on me and i think that has to do with me how old are you emma did you get your ears pierced what did you do did you get a tattoo what happened it's it's been so ridiculous you guys like so you're still daddy's little girl, and he's like,

I don't like what this guy's done to my daughter, and I don't agree with this. I don't like it. He votes wrong. It's everything. And I think he's never let me go. I think he doesn't like that I've become a bit more assertive, which I feel like my husband has helped me really grow. I mean, you're married, girl.

I'm not married. You're married. Have you had a hard conversation with your dad yet to say, Dad, I love you. I'll always be your little girl, but I'm also a grown woman, and I'm married to this guy, and we're doing our own thing. And it feels like you're using this and dangling it over our head to go, All right, you little grown-ups, here's your $60,000 loan back.

Is that a good summary? I feel like that's a very good summary, unfortunately. And you're the youngest of six. Did you say that? Yeah. Okay. Papa is struggling. That's what it sounds like. It sounds like he is trying to hold on to a last little thread of what life was. At least that's the way it sounds. Is he doing okay financially? Because it sounds like he doesn't have the ability to even pay back this loan. Otherwise, he would have done it. So that's why it's so complicated.

I have wanted to help with the loan, never take it on myself, but I've wanted to help because honestly, he's made some poor decisions. He's a teacher. So he told me recently that when my sister and I were in school, he deferred some of his own debt to keep us in private school and pay for music lessons and stuff like that. So I feel like he has in his mind, he's done the very best he can,

which I'm sure he did in many ways, But I think you're reading too much into it. I got to cut you. I think you have to look at this pragmatically and look at it for what it is. Otherwise, you're going to keep circling a drain because the truth is, yes, our parents do sacrifice for us and they they're supposed to and they do, you know, cut things off for them so they can do it for you like that. They're supposed to do that. And when they do it, we're grateful. And I don't think any you don't have to replay that to prove that you're grateful to him because. And when they do it, we're grateful. And I don't think any,

you don't have to replay that to prove that you're grateful to him because we know that you are. But if we look at this, like, let's just pretend that George and I are kind of the judge here. I think Parent PLUS loans are really tough because here's what we're really deciding between. The money was used for you and it was for your education. You got your education and then you kind of, did you ask for the loan? I don't know. Did you? No, I remember he really, he really wanted me to go to this college. And I did want to go, but I remember saying like, are you sure? This is a lot of money. But if you didn't pay for it, what would have happened?

You just wouldn't have gone or what was the. I would have gone to a different school for much cheaper or little to nothing. And you would have paid for it in cash or there still would have been a smaller loan? So, no, actually, this is the kicker. He actually teaches at a college and I could have gone there for free. Oh, my goodness. I know, it's so bad, you guys. Sad.

Isn't that like the one reason to work at the college? Your kids can go for free? Oh my goodness. He really wanted me to go to this Christian private college. Okay, but now we have the facts, because I don't want to run out of time. The fact is, he took out this loan. He wanted you to go to this school. You were willing to go someplace for free, and let's add the legality to it. The loan is in his name. So if you came in front of Judge Jade. You have no legal or moral obligation to pay this back.

But if it's going to weigh on you and you have the financial means, then help pay it down. It's that simple. And have the conversation. You didn't have the conversation before. So the next best thing you can do is have one now. And you go, all right, here, can we come up with a game plan? I don't want this to hurt our relationship. I know you disagree with my husband, neither here nor there.

Let's make a plan to get rid of this debt. And if I were you, I'd try to settle for half and half. I'd be like, let's go halfsies on this. You played a part in it. I took it. I took the gift. I took the loan. So I played a part in it as well.

And so that's what I would do and I if you do make this try to I say this but this is family stuff and I hate I hate business between family but try to get it in some sort of writing of hey this is what we both agree let's sign it and so that we can always say hey we said this here's what we said I'll pay 30 30. You'll pay 30. What's the balance now? Is it still 60? So it's 60. I'm guessing it was closer to 72 when he first took it. Okay, well, let's talk about it at this point and say it's 60 now. You pay 30. I'll pay 30.

And no hard feelings. And from now on, none of us co-sign for each other. And, you know, maybe you write him a letter and say all the wonderful things that you were going to say on the air about how he sacrificed, and that's that on that. But if the wedge has already been driven, then this debt is not going to change much of that. No.

It sounds like he's got other beef, and this is just one part of the puzzle, which I'm so sorry. That's not a fun thing to deal with, and money getting involved just makes it 10 times worse. It does. Yeah, Parent PLUS loans are a big, big, big no-no. Please big no, no. If you're listening and you ever take a parent plus loan, just know I'm mad at you and a puppy stop wagging its tail. Yeah. It's a problem. Don't do it. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers.

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We're the ones taking your calls. We'll give you our best advice. Some say the advice is worth what you pay for it. All right, let's go to Sophia in Washington, D.C. What's up, Sophia? Hi there. So I'm kind of dealing with this situation where I got divorced three years ago. I was able to buy my ex-husband out of the house.

I'm looking at getting remarried now, and my boyfriend is asking to put on the deed to the house. Right now or after you get married? After we get married. And you don't want to? I've had to make a lot of sacrifices to be in the financial situation I'm in, and I just don't feel like he makes those same sacrifices, and he's just walking into a house. Hold up, then why do you want to marry this guy?

You already have resentment toward him. I don't. He just really enjoys boating, and I enjoy having a roof over my head. Girl, uh-uh. There's something. There's animosity there. You don't think this is going to play out in a marriage? Because it's only going to get worse from here on out. Because it's going to be, well, this is my money that I earned, and so I'm going to spend it here, and we're going to split the rent. At that point, just get a roommate. I don't want you to get married if you're going to enter into the situation

where you're resentful. So the perspective I come from it is that once we're married, we'll put everything into a bank account together, and we can save up for our own house. The problem is I have a child from my first marriage and I want the house to go to her if the conversation to the point to where george and i were like wow this woman has some beef towards him so let's kind of back out for a second because you're marrying a guy right that if to me if you're marrying somebody this is the person you ultimately trust that you want to build wealth that you want to build wealth with and you trust your children

with them so what i just heard you say sounded as though, and how old is your child, by the way? Three years old. Three years old. So what you just said sounded as though if something were to happen to you, God forbid, you want the house to go to her, but wouldn't the house go to your spouse who is taking care of your daughter? What's wrong with that? Her father would technically get custody of her. Okay. So she wouldn't have any of that. So then the father is going to move into the house that your husband's in to take care of her?

No. The way I have it set now is that the house is in a guardianship, so my parents are the executors on that and would be able to rent the house out until she's 18 and then sell it. Do you have life insurance? I do. Okay, you get term life in place 10 to 12 times your income? Yes. Okay. That could be the solution to a lot of this, because you can make her the beneficiary and she'll have the money. It can be in a trust. You'll have the guardian of it. But I feel like this is like a leverage piece and you've got a lot of hurt from the past, which is very

understandable. But I think bringing that into this new marriage is going to just put a wall up instantly that says, I'm not going to let you totally in, but I want 100% from you. And I felt the wall. When you just said it, I felt like, oh, wow, this lady's got, she's really protecting herself is what it feels like you're trying to do and really almost walling off your daughter as well. And it just, for George and I, I mean, we've just been talking to you just for a couple minutes and it feels like, oh, okay.

So I like what George said about the, the insurance. And if I'm the spouse, like let's George and I sit in, in your boyfriend's situation for a minute. If I come into this, I'm like, wait a minute,

I'm living with you, but I don't have any rights. You know, like I want to go on the mortgage together and of course it makes sense if something were to happen to you that you know yeah is his name going to be on the mortgage no his name would not be on the mortgage why not i guess that would require us refinancing and it's at a low interest rate okay but he and let me put it in his shoes.

He's going, okay, I'm helping her build equity to a home that I have no real involvement in. And that's going to go to the daughter, which I'll have no real involvement in if something were to happen. You did mention that you were interested in saving up money together to buy your own place. What would happen if when you got married,

you said, okay, I've got the life insurance for my daughter, she's covered. And essentially, if you guys were to get married your your spouse would have life insurance too so if something happened to him you'd be covered so like everybody's going to be covered here and then if you guys said okay this current house we're going to sell it and buy something together what's wrong with that or you just add him to it yeah I. I guess I wanted him to understand what it's like to be a homeowner and sacrifice with me to build something completely from scratch together. Okay. I think we can address that without using this as a leverage piece with the deed. I think you

need to address this with him and say, listen, I want to spend my life with you, but I have some real concerns about the way you handle money. And I want and say, listen, I want to spend my life with you, but I have some real concerns about the way you handle money. And I want to raise this child. I want to build wealth together. And it sounds like you want to just go have fun and boat in your spare time. And I need someone who has more skin in the game. I think if we address the underlying issues, then the deed is whatever. Add them to it.

Don't, you know. Do you think you could have that hard conversation with him? I think I can. Would he be shocked to know that you don't like his free spirit, childlike attitude toward money? He would not. Okay. This has come up before. It has. I would also use that gut check to say should this relationship move forward until we address this because if we don't align on this i don't think you should move forward i wouldn't be fair he has been addressing it he recently sold his boat stop paying marina fees so there are steps in the right direction so he's boatless now why we want he's boatless now. He's boatless now. That sounds like the

ultimate sacrifice. Yes. And I do appreciate it quite a bit. Okay. So it sounds like he is wanting to make strides. And again, if you're going to go into this, I would be all in. I think it's the only way I know you have have past hurt. And once you're going, you've gone through a divorce in the back of your mind, you're always thinking, I need an escape hatch with the what ifs. But I think if this is going to work, it's got to be, we're all in on this. And that means we're going to combine bank accounts, combine incomes, combine everything,

combine houses, deeds, mortgages. It's all us. And that's what creates a teamwork. Yeah. Okay. Okay. Thanks for the call. It's good to have a reality check. Yeah. We want the best for you. You know, we're not trying to accuse you or poke holes in your plan, but we really want the best for you. And when you call and we hear that in your voice,

or we hear that fear or that hurt, we definitely want to address it because it's more than money, right? In this case, it definitely is more than just money. There's a lot of emotion there. There's, to your point, George, a lot of previous baggage there, and that's normal. Well, and she's got, you know, the mama bear wants to protect that baby, that three-year-old, and I totally get that. So there's a lot at play here, and there may be some healing to do, and I just don't want that to be projected onto this guy and hurt the relationship in the long term. And the truth is, you know, if you're dealing with a three-year-old,

if we're really thinking about this, okay, you got a three-year-old, you want to make sure they're set up. Life insurance really is the best way. Because think about it, a lot of times, if somebody does pass away in their left property, the first thing they do is sell it anyway, right? Because they want to get their hands on cold, hard cash. So that's really what people want is that cash. So 10 to 12 times your income is going to be plenty

to make sure your final wishes are taken care of and then that they're taken care of. It's for anybody who relies on your income basically is what you're covering. And the idea there is that you take that lump sum from the life insurance and you invest it and the returns off of that could replace your income. That's right. That's why we say 10 to 12 times. We've seen the average return in the stock market over a long period of time, 10 to 12%. So if you want to get term life in place, connect with our friends at Zander. That's where I have mine through for my wife and I. Same with Jade. And just run away from anyone selling you whole life. Term life is a fraction of the cost. You're going to get great coverage and you only need it for that 15 or 20 or 25 years because you're going to become

self-insured if you follow the Ramsey plan. You're going to get the house paid off. You're going to build up sizable investments in that nest egg and your family's going to be okay. And if you're a stay-at-home parent, we still recommend getting, you know, at least a half million dollar policy. Exactly. Because you have something again, there's people that are relying on you. But what we don't do is take out policies on children. So hopefully that gives you a little bit of insight. This is the Ramsey Show. This is the Ramsey Show. All right. The Ramsey Show question of the day is brought to you by YRefi. Hey, we've all made money mistakes.

And so if you have defaulted on private student loans, trust me, I know all about that. We're not judging you, but we are saying that you can do something about it. So you need to contact YRefi. Okay. YRefi was created for people in your exact situation. So go to YRefi.com slash Ramsey. Again, that's Y-R-E-F-Y.com slash Ramsey. And remember, it may not be available in all states. Today's question comes from Shelby in Oklahoma.

My husband and I are in our early 20s and just got to baby step four. Our income is just north of $250,000 with the help of overtime and side hustles. But living below our means is actually how we've gotten to where we are. I'm facing a lot of emotional conflict over family and friends hating on us for doing the hard work of the baby steps and for our high income amount. We don't have anyone cheering us on except the Ramsey community, and it feels very lonely at times. Knowing that we're still very early in our careers and knowing we will only increase in our wealth, will the jealousy and naysaying only get worse? We really just need some encouragement.

Wow. Will it get worse? Probably. Because they're going to make fun of you for doing the plan. Then they're going to be jealous, envious, and judgmental when you do well. Yeah, they're slipping on that hater, right? There's no winning with these people. Yeah.

Man. So here's an easy life hack. Stop caring what other people think. If they don't pay your bills, they're slipping on that haterade. There's no winning with these people. Yeah, man. So here's an easy life hack. Stop caring what other people think. If they don't pay your bills, they don't get a vote. That's my policy. I agree. Yeah, they're on that haterade. But you know what, George?

It is painful because you want your family to be like, yeah, way to go. You want them to notice that you've done something good, right? You want them to slap you a high done something good right you want them to slap you a high five or say good job or just some sort of acknowledgement so i do think it's tough when you don't get that when you've done something pretty amazing uh like pay off debt and when you've done something amazing like you know garner a higher income that that's that's there's probably two pieces here number one i think they're secretly envious of their amazing income in their early 20s. I mean, how many people in their early 20s are making 250 grand?

Not many. There's one piece. And then the other piece is they're doing a hard thing and transforming their life. And that holds up a mirror to how out of shape I am financially. That's right. And therefore, I don't like it. Yeah. And so I think there's a both and there, and it's only going to get worse as they become debt-free, as they make more money and build wealth, because then it's going to be, wow,

look at the house they have. They must be doing pretty, and we did so much for them. You'd think they would. It's a personal problem. And so there's always going to be something. With unhealthy people, you're always going to have some of this unhealthy, toxic conversation. So the best thing you can do is shut it down, ignore it, don't talk about it. And again, you said we have no one except the Ramsey community.

Listen, there's hundreds of thousands of people in the Ramsey Baby Steps community Facebook group alone that are excited for you when you tell them weird things like we just paid off our house. That's right. So there's always a place for you to go. It's a safe place. And so go join that group. Go join a Financial Peace University class.

All of that. Get people around you who want to see you win. And it's going to be a much more fun journey. Yeah. Hold your head high. Tell them get that dirt off their shoulders. Okay, George, you know, something that I noticed with these calls lately, and it's worth talking about because, you know, we're going into this third hour here. We talk so much about money and the health of our money, the peace that we need to experience with our money, getting debt free. And we talk about that so much because we know that money is entwined in everything, right? It's wrapped up in everything that we do. There's a motivating factor underneath it all. And when you're in debt, it does skew your

motives sometimes without you even realizing it. Think about it. You're in debt, it does skew your motives sometimes without you even realizing it. Think about it. You're in debt. You take a job that maybe you don't like, but it pays more. But the motive is, I need that money because I want to pay off this debt. Or you sign a Parent PLUS loan because you think, maybe this will give me a connection to somebody and I'll be able to kind of help them make a decision. I can have a say in what's going on. So there's a motivating factor underneath that. Or I don't know one of the callers, you bought a house and you bought it in a hard time and you sacrificed everything to get it. So now that you're getting married to a guy, he didn't have to do that sacrifice. Now you've weaponized.

Now you've, so there's always this like motivation underneath money. And so ultimately, we know that it's important to have a healthy relationship when your debt is cleared it clears a lot of that motive out and when you have a healthy relationship with how you view money it clears a lot of that out and so just a reminder that it's not just paper with dead presidents faces on it there's a lot of emotion and relational equity tied up in that. That's one of the reasons we tell people never ever under any circumstances

lend someone money. Right. Because that adds even more. If you want to gift it to them as a one-time thing, that's fine. But if you lend people money, it always ends up hurting the relationship. You become the banker.

That's right. And they become the person who owes you money, which makes it real awkward every time they interact with you and you see them go on vacation and you go, wait, they owe me money. No matter how much you love them. So don't intertwine money before you're married. Don't sign the parent plus loan for your kids. Don't take out the debt consolidation loan for your boyfriend. And if you think these are the things I'm making up, these are all calls we've taken in the last 60 minutes. Yeah. And then there's the part of it, George, where let's have conversation. Let's normalize

talking about each other's views on money. Because if you're going to enter into a relationship with somebody, but you're not talking about the elephant in the room, which is the fact that we both have money, he makes more than I do, or I make more than he does. I spend it like this, he saves it. If you're not talking about that, you can hear when people call in and there's kind of that animosity or there's a little bit of resentment because they're not talking about it. And so if you're dating someone, if you're engaged to someone, if you're married, it's never too late to say, okay, let's have a real conversation here because here are my views on money. Or maybe I actually like to start with the other person's views on money. Tell me your views on money. What's your philosophy?

What do you think about debt? Is it something that you did one time and you made the mistake and you never want to do it again? Or is it something that you did one time and you feel like it's a great thing to leverage? Have those conversations because it's going to pop up again. It's like a zombie. It never really goes away. And so you want to know what this person's views are before you get too down the line with them and before it feels too late to make a change.

Yeah. And if those are that person's principles and values and they're not going to change. That's fine. At least we know. Now we know. But now we know not to move forward with the relationship or we have to go to counseling to find out how we're going to overcome this in a marriage. Yeah, because how many times have we taken the call where one person in the relationship kind of has their money together or they're working on it

and then they feel like they're doing so much better than the other person. Yeah, they feel like they're doing so much better. And in their mind, they're kind of the caretaker. They've taken in the person who wasn't making as much, the person who didn't have as much debt or has more debt, not, you know, not having the better financial situation. And so underlying the whole time they're thinking like, are they just taking advantage of me? Are they just living here? Because I'm giving them a... They're mooching. Are they mooching? So this is, these are many of the ways that money just filters in. And if we don't talk about it, it kind of just festers and grows in our minds. So have these conversations with your spouse. Have these conversations with your boyfriend if you've been dating for a while. Certainly have them

with your fiance and make it part of marriage counseling before you get married. Yeah. Well, I encourage people to take Financial Peace University as a part of prem counseling like before you get married yeah well that's why i encourage people take financial peace university as a part of premarital counseling because it'll start these conversations it is a big deal okay um do we have time to take another call i don't want to is it risky no it's risky let's just rolling dice no one thing i do want to add to that jade a lot of people think well i don't want to marry someone with debt i don't want to date someone with debt. I don't want to date someone with debt. And here's the deal. We never discourage someone from marrying or being in a relationship with someone with debt, but you do have to figure out, are they wanting to stay there? If they're with gazelle intensity trying to get out, and a lot of people go, well, Jade, I worked so hard to stay debt-free or become debt-free,

and now they're coming into the relationship with $100 thousand dollars in student loans and if you treat them like this project or like hey that's your debt you need to figure that out once we're married that don't get married don't get married you're taking on all of them all the good all the bad and the bad might be part of their debt but guess what if you look at it as this is a season hey i know i saved up all this money for a house, but now it's going to go toward my spouse's debt. And then there's other part of it where it's almost like we want them to have the same penance that we had. And it's like, I had to walk through this. I had to sacrifice. You should have to too. And I'm like, listen, if you're getting married and you have the money to bless your spouse in the way of saying hey we're getting married i've saved up

forty thousand dollars and there's forty thousand dollars of debt once we get into this marriage that's a blessing and to make it seem like you have to you have to go through what i went through that that's another sign of you're not ready you're basically just get healthy before you get in a relationship yes that's all we're asking and if you don't want to marry them if they're in debt then don't marry them that's also your choice too it's a free country it's a free country this is the ramsey show hey you guys i'm not a fan of the big banks and you probably already know which ones i mean but i do like credit unions because they're non-profit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union

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This is the Ramsey Show. I'm Jade Warshaw. Next to me is George Camel. Hey, guys, I know we've been talking about this, but I really want you to be on this Live Like No One Else cruise, so we're going to keep talking about it. It's March 22nd through the 29th, 2025,

and you already know most of the cabins are gone, but we want it sold out. And again, this is not your average cruise. This is a premier caribbean cruise caribbean or caribbean i'm a caribbean kind of guy all right that's right caribbean queen that's it okay so we're going to turks and caicos puerto rico saint thomas bahamas and again this is a top of the line cruise i can tell you i've been in the cruise business for a long time that's what i did before i came here holland america it's pretty top draw okay this

is a nice cruise holland america it's the new stottendam uh it meets the standard for the ramsey guest okay let's let's just put it like that we're not gonna have anything shabby this is very nice it's all inclusive foods. Food's included, even room service. Okay, so you can get your hot dog on at 3 a.m. in the morning, and no one's going to stop you. Get your hamburger. It's like a lot of poor decisions happen on cruise ships at 3 a.m. Heck yeah.

That's the fun part. You order room service. You have some drinks. You're like a kid again. Yes. It's like blank check, Richie Rich. Yeah, and then they've got these specialty restaurants that are top of the line. And then there's, of course, really, really great entertainment while you're on.

There's pools, the hot tubs, the fitness center. Ken and I will be on the pickleball courts. There's the spa and salon, which I have been to. And I can tell you that it's on point. Jade and I will be doing karaoke night. Yeah. I told him we have like a Sonny and Cher thing planned. Oh, that's amazing. We should work on a routine a routine yeah a little song and dance for the people yeah

so all the ramsey personalities are going to be there and no george and i are not going to do sunny and sheer that is a lie but we will be there costume at least we'll do the voices that's right we're gonna have fun the point is by the time you end we're all going to be best friends because we will have spent seven days with each other for better or worse. And so, yes, if you want to book your cabin, do it today at RamseySolutions.com slash cruise. You can click the link in the description if you're listening on YouTube or a podcast. Be there or be square, my friends. All right.

Let's take another call. We've got Mark. He's in Augusta, Georgia. What's going on, Mark? Hey, guys. Hey, how are you? Well, I'm good now. We got power yesterday.

It took us 12 days and stuff. Oh, my goodness. Was this from Helene? Yes. Oh, wow. It looks like somebody up in McKenna, what is it called, Willie Sticks or something like that, and just dumped it. Oh, my gosh.

My neighborhood and three neighborhoods down, we're probably like one mile directly from the Masters. And where people park their cars, I don't know if you've ever been there, on the outskirts of it, there's probably 50 pine trees down there. We're slowly getting power over in that area and stuff, but over here, people have like four and five pine trees on top of the house there's no way no way that the rebuild the house and stuff what about you actually we had the last storm was 10 years ago and we used to get them every 10 years there was an ice storm that came through here yeah and it broke down a lot of limbs and all

that stuff so what we decided to do then was go ahead and get rid of all the trees in our yard so that saved you yes so how can we help today how can you what how can we help today okay one of the things i wanted to talk to you about was this happens to a lot of neighbors and stuff when their neighbor's trees fall on their property and stuff and then the neighbor's responsible to remove their neighbor's tree and stuff but i don't know who passed that law and stuff i just don't get it so did did a neighbor's tree fall on your house it's called no if a if a neighbor's tree falls in your yard which which it did it did during the ice storm that cost us $4,600 to remove it.

Okay. It was their tree and stuff, and it fell in our yard. So that's what a lot of people are dealing with right now, and some people don't have the money and stuff. And the neighbors are just sitting back and saying, hey. So what are you dealing with, Mark? What's your financial question? Okay.

My financial question was was we just got a house painting on stuff we had storm windows on the front of the house and stuff after the storm no power and all that stuff we couldn't help come loose because the flies would drive us crazy okay so I've got I've got one company and I'm not going to say their name and all that stuff they're well known and they said they will come out they're gonna have to measure them they'll be homemade and all that stuff, and they're well-known. And they said they would come out, they're going to have to measure them, they'll be homemade and all this stuff, and it will take us four months before we can get them.

But they want me to give them 50% up front. And I said, I'm not going to do that. I said, I'll give you 10, maybe 15. I said, I can even get you a letter from the bank saying I'm good for the whole loan. But that's money that I'll be losing if I have it in the savings account or something like that.

How much money do you have in savings? Do you have the full amount? $69,000. Okay. I'll get the full amount. I'll be tired for Kimmy Clark. I'm good to go. Let me pull back.

So you're trying to get storm windows or you're trying to get a different type of window. All the windows and they'll have storm windows. And how much is that going to cost total? I actually ran across a guy. I saw the business and I got a haircut and I walked in next door to grab a beer and the guy was sitting right there

and he said $8,700. Okay, well I don't know that I would go with a guy who was just sitting there getting his haircut, drinking a beer. I would get multiple bids from reputable companies that you search out. My haircut. Oh, but still, he's the first guy you saw. And he mentioned it. Here's the thing.

You've just come off of something traumatic. It's scary what just has gone on where you live. Oh, he would not believe. And then you've got the 12 days with no power. And you're thinking to myself, I want it just like you did with the ice storm. You're like, I'm doing everything I can to make sure if this happens again, I'm in a better situation. So you cleared out the trees and now you're going through that same motion again. And you're going next time this happens, I'm going to be a better situation. I'm going to get storm windows.

Storm drains. Yes. And I'm not mad at you for doing that. And it might be a good idea based on where you live. However, I don't want you going with the first Yahoo off the street that says, I'll do it for you, 8700. I want you to take your time. No, no, no. It's not that. This is a place that's well known. My neighbor across the street and all his friends have highly recommended this company. Yes, but I still want you to get a couple of estimates, right?

That's just you doing your due diligence and saying, there might be another well-known company that'll do it a little bit cheaper. Maybe they'll do it a little bit faster, but at least you can compare, right? And that's just being a good consumer at that point. Oh, yeah. You get your expert and you look at the type of materials and all that stuff. That's right. And look at that and all that stuff.

And then when you do it, only pay cash. Do not borrow money for this. Okay. Can I end with this? Jay, you were talking about this a bit. I've been listening to you for 40 minutes. 45 minutes. I'm sorry, Jess. I'm so tired. That's okay.

45 minutes, and the women we're talking about that we're trying to protect their investments. Well, they're right. Guys are nothing but dogs. I'm telling you. So they'll go wherever they got to do and stuff. But then they finally realize at the end, I need to settle down somewhere. Wait a minute. You went off on a tangent. We're supposed to be talking about storm windows. I know, but I'm just telling you. Mark's got some beef with these guys out there.

Guys will take advantage of women. Well, not a good guy. Hey, we hope that everything works out with you in this storm. And I do think if you live in an area that's prone to natural disasters, you need to make sure that you have the right things in place to keep you covered. And of course, for a lot of people, it's impact windows. It might be having the hurricane-graded roof, right? Obviously having the right insurance is in place. And we know that insurance has gotten very expensive because of the storms that are happening and so just do your

due diligence the other piece is don't let companies use this to sort of fear monger and get you in your time where you're vulnerable to say you need all these things to protect your family and it's going to cost thirty thousand dollars and here's the loan right a lot of people will fall prey to some of that as well because they're so scared. There's fear. Yeah. And so you got to do things from a calm perspective. The person with the most patience, information and options wins. And that's what we're talking about here. Do your research with a calm head, pay cash, save up, have an emergency fund in place, don't owe people money. And that's going to put you in the best position for no matter what life throws at you. And no matter what it is that you're trying to get done,

don't go with the first company whose card you get, you run into them at Home Depot or you met them at Chili's. I don't know, whatever it is. At least get a couple of different estimates because the truth is you might find a better one. Yeah, I don't take business pitches in Chili's. Yeah. That's my rule.

It's my thing. No, no, no. Well, Jade, this hour is about to end. So if you're listening on YouTube or podcast, you got to jump over to the Ramsey Network app to finish the show. So go get it. If you're on radio, the show will continue.

But if you're on YouTube or podcast, jump over to the Ramsey Network app. You can go download it in the app store for free or click the link in the show notes. And don't miss out what's coming up in the third hour because I see some good calls on the board that you don't want to miss out on. I was approved for a home loan.

Should I get a home in Baby Step 2? We'll talk about that. Is it better to pay off my mortgage or invest the extra into retirement? Juicy. I don't know. That's a cliffhanger. You'll have to pop into the app to see what's next.

This is The Ramsey Show. From The Ramsey Show, it's The Ramsey Network. I'm your host today, Jade Borshall. Your other host today, George Camel. We're taking your calls for the next hour. Thanks for being in the Ramsey app, by the way, because if you're listening to this hour, it means one thing. You're either listening on the radio or you've gotten into the Ramsey Network app,

which is really, really cool. We're glad you're here. You can still call in. It's still a live show. 888-825-5225 gets you in. Let's go to Dee in Raleigh, North Carolina. What's up, Dee? Hi, how are you guys doing today? Doing great. How can we help? Yes, ma'am. So I kind of came into a dilemma. So I was laid off about a year ago and I was making around 75. And up until that point, I kind of fell into deep water and I wasn't able to find anything. So I was working smaller jobs and I

ultimately picked something that was around 50K a year. And so I was living off of my credit cards at that point. And I know that's not the best decision, but at that point I had to. So I've been presented with the opportunity to move to a little bit of a bigger city where I would possibly make that $20,000 back, so maybe around $70,000. And I'm just, I have $69,000 worth of student loan debt and credit card debt, but I've been on the baby steps. So just basically trying to pay everything down slowly. Did you say 69,000 of debt?

Yes, ma'am. Okay. Yeah, 69. And so getting this job opportunity, I know I will make more, but I don't want to make the mistake of, you know, increasing my living expenses too much just because my salary increases what city is it it's Las Vegas okay so I was wondering should I stay in maybe maybe a less than desirable area but not dangerous where it's more twelve thousand,000, I mean, not $12,000, excuse me, $1,200 for rent up to $1,300 or go into that $1,400 up where it'll be a little bit nicer.

I think my attitude would be a little bit more positive because I am making the change to kind of get back up again. Or should I go with a home loan? I was a part of the NACA program and I was actually approved for a home loan. I was a part of the NACA program and I was actually approved for a home loan. But either way, I'll be paying like $1,900 if I get the home loan or do the higher value department. Let's tackle one thing at a time. Okay. Have we priced it out? Because to your point, there's a couple of factors here. To your point, you're going to a larger city. And just because you're making a little bit more money, yeah, the cost of living could go up. I don't know, but I would definitely compare rent in Raleigh to rent in Las Vegas. And what taxes will be and figure out, is it actually going to be worth the move?

What will your take-home pay be? Have you gotten on a payday calculator to put in that city and state to see? I have not. I mean, I looked at the rental rates and everything. They don't have state taxes, of course, as we do have state taxes. So my take-home pay would be higher than here. Okay. Well, let's not guess. That's your homework. I want you to go on a calculator and put it in for that state to see exactly how much it would be. And when you say you have an opportunity, did they offer you the job? I'm in the last step. Actually, today is when I need to find out. Okay. And so you don't know salary either?

No, not yet. But it starts way higher than my current one. Okay, good. Well, then hopefully you can negotiate even better than $70,000. That's great. I hope you get it. So if you get get the job that would be the calculator the the homework is going and looking at a calculator to see what it what's my take home actually going to be then the next thing is when is we're researching rent in the area to see if that lines up and then what we're looking for here when it comes to to rent because i think going to a new place if you decide to go we're not going to up and buy a house right off the bat. While we're $70,000 in debt. We want that to be a blessing when the time comes. So your pathway would be, I'm going to rent, and I'm going to try to keep that rent no more than 25% so that I can have a nice bit of margin

to tackle the $69,000 of debt. And the way we're going to tackle that debt is with the debt snowball method. Are you familiar with that? Yes, I am. Okay. And you said it's credit cards and student loans? Yes, ma'am. Okay, great. Have you cut up those credit cards? I can't do it right now because I have to pay them off first. No, you don't. Well, you can cut them up now and still pay them off. There's no rule that says you can't. I'm just, I have a feeling that when life gets tough, you turn to those cards as a security blanket. And I think Dee doesn't need those. She's in control. She's not going to let a lender control her life at 22% APR. You got to burn the boats. Have you heard that? When you don't have the option, you don't do it. And that's the beauty of just using a debit card and using your own money yeah so i'd encourage you to do that as a part of

this process okay definitely i mean i don't use it like honestly all i've been doing is trying to pay it down but honestly my my apr is way higher it's at 29 and yeah yeah apr you know what it stands for no i added pain and regret i knew it was going to be something okay so you've got your homework i feel like you're on the right track i'm rooting for you i hope that this job comes through i think it would be really really great for you to just to get back on your feet and honestly george if i'm being honest, I kind of like the fact Las Vegas is just full of opportunity and it's a larger city. So even if her going there, if it's not the be all end all job for her, I feel like it does open up a world of opportunity if she's been kind of in the Raleigh market and not been able to get. It's a step up the ladder because the next job she takes is going to be

more than 70. Exactly. Not less. So I think there's some It's a step up the ladder because the next job she takes is going to be more than 70. Exactly. Not less. So I think there's a nice move here, especially if she's willing and open to it. I mean, I moved when I was 20 across the country and it was a great move. Yeah. Best thing you can do sometimes.

So the key here is there's a couple of teaching points that we can go through, which is A, as your income goes up, you do want to make sure that your lifestyle is not going up because then you're never going to see the margin you're never going to see kind of that fruit of that labor and so in her case she's got to be careful because 70,000 feels like a great jump from 50,000 you get a 20 grand raise you think i can go spend 20 grand no it didn't it don't work like that

especially when you get 70 grand in debt i see that as now we're going to start paying off some debt with this extra 20 grand. Yes, it's not the time to get a nicer apartment is what we're saying here. So there's that piece to kind of think about. And then, you know, when you think about a move moving cross country, there's a lot of other factors to consider. A, you've got to now afford to make the move. Yeah, which I hope they hopefully they throw in a relocation package. Exactly. Cover some of those expenses. Yeah. and if you're listening, D, that might be

something you negotiate because it's expensive to move cross-country, George. I can tell you. North Carolina to Vegas, that's about as far as you can get. It's about as far as you can get. When my husband and I moved from South Florida to here, I was shook. George, usually you can show me a price tag and I'm like okay cool and i can like just keep my poker face when i saw what it costs to like do just like you know mayflower or you know just the typical they come load up the truck and drive it there for you it's like twenty thousand dollars oh my goodness you were like all right sam warshaw you're about to be driving an 18 wheeler you get your cdl let's go on a good day on a good day it's twenty thousand

dollars george oh my goodness and so i don't think people understand how much like i don't know maybe i just hadn't checked the prices in a long time it might be cheaper to sell everything you own and then just move we did a u-haul i start from scratch we did a u-haul my husband 20 grand at ikea i can i can make it happen yeah we got of a lot. We got rid of a lot of stuff. Cause I was like, we have to make, and we, we priced out everything, the pods, you know, the, the big truck, you driving it yourself, like every type of option we priced out, it's expensive to move. So make sure you're doing your due diligence on that.

And at the end of the day, man, go get you a U-Haul and just drive it and save yourself a lot of money. Oh my goodness. This is the Ramsey Show. This is The Ramsey Show. I'm Jade Warshaw. Next to me is George Campbell. We're taking your calls about your life, your money.

It's not too late to get in where you fit in. 888-825-5225 gets you on the line. In Syracuse, New York, we've got Adrian on the line. What's going on? I'm going to hold back what I want to do. What's going on? How's it going? Good.

How can we help? I'm just calling because me and my wife recently filed for bankruptcy. And I'm just calling to see what advice you guys can give me that would help me from making the same mistakes again and to help me invest in my future and eventual retirement from the military. Wow. Can you tell us what happened? Give us the spark notes. How much debt were you in? I was young and dumb. I made a bunch of mistakes in getting, you know, the newest and latest gadgets, getting cars I didn't need. I had approximately, you know, $54,000 in debt,

37 of which is getting discharged, and the remaining which is between a current car loan and student loans. So you filed bankruptcy over the $54,000 because you felt like you couldn't make the payments? Well, at the time, I started the process prior to my enlistment and it didn't get finalized until after I had enlisted. But what caused you to go from like, all right, I'm in debt to, all right, I have to file bankruptcy. That's a big leap. Um, let's see, I had, uh, two repos. Um, I had a bunch of, uh. And when I started considering it was prior to my enlistment. And mainly the fact that, you know, I just wanted to get away from it and just kind of start fresh. What part of it, so only 37 was discharged. We knew that they weren't going to take the student

loans. How much is the remaining 17 is student loans and how much is the truck? It's $12,000. The student loans are $12,000? No, the student loans are $5,000 and the car loan is $12,000. And where are you at now? Give us a snapshot of your financial life. How much money do you have in savings? What do you make? So right now, I have approximately $3,500 in a rainy day fund

and about the same amount in an emergency savings fund. What's the difference? And I currently net, so the $3,500 is just for like birthdays, holidays, buy my kids presents for Christmas, their birthdays, anything else we decide to do. And then the emergency fund is strictly for if I go without pay or we have a car emergency on the side of the road, stuff like that. Okay, so you've got $7,000 to your name. Anything else, any other assets we should know about? Currently, no.

Okay. Other than my pay. Okay, and what is that pay again? Monthly? Right now, I'm netting about $50,000. Okay. Other than my pay. Okay. And what is that pay again? Monthly? Right now, I'm netting about $50,000 a year. You're netting $50,000 a year. Okay. What about your wife, kids?

Tell us more about that. Does your wife work? She, at the moment, does not work. She's looking for a job. And then our kids, my son is two, my daughter's three. Okay. Is she not working because she's home with the kids or tell me more? She's not working. It's a mix because of being home with the kids. And it's a mix because we've only been in the New York area for about six months now. I didn't PCS to New York until about April.

Okay. So she went from working where we were living to not working out here. Okay. And she's in the process of trying to get a government job. Okay. And what do you think she'll make based on what she's made before? What do you think she'll make based on what she's made before? What do you think she'll make based on what she made before? Right now we're estimating that she'll make roughly about $37,000 in net income once she starts. And you guys are renting?

Yes, but our rent is covered under BAH. So I don't, we live on post, so I don't consider that because it automatically goes to the housing company that manages our living area. Okay. How long will that last? That lasts for the entirety of me living at this duty station. Okay. Which do you know how long that'll be? I'm just trying to... I'll be there about whenever.

So I'm estimated to be here until April of 2027. Okay. So we've got some time on this plan. Okay. George. We got it. We got it. Here's the deal.

You asked us how to move forward after this. This was a traumatic experience. And the key is we have to go, it's never an option again. We're never going to borrow any money again, except for maybe a 15 year fixed rate mortgage when the time is right. Do you agree? Yes. The other piece of this is on top of getting on a written budget that your wife and you and your wife are going to go, we agree, this is how much is coming in, this is how much is going out, the rest is going toward the debt, we have to also make sure that we stop caring about the things we cared about before,

and that includes your credit score. That includes having fancy things. And it sounds like you've made the turn emotionally. Right? Yes. Yes. Okay. So if we're not concerned about building our credit score, we're not going to open lines of debt, debt is never going to be a part of our life, then what we can do is start tackling this debt. And personally, if I'm in your shoes, I'm going,

hey, we're going to limit Christmas gifts this year because mom and dad are broke and we need to get to some financial, some financial safety. And that means that seven grand you have, I would take five of that and knock out your student loan today. What's your student loan payment? Roughly about $170, $580 every month. So you're going to get $180 back in your life tomorrow because you're not going to have that payment anymore once you pay it off. That just leaves the truck. You owe $12 on the truck. What is the truck worth?

The truck is worth a little bit over $10. Okay. So what you could do if you wanted to, I think you can keep the truck at this point if you're going to aggressively pay it off. You could get rid of the truck and save up cash and get something cheaper. Okay. Do you of the truck and save up cash and get something cheaper. Okay. Do you like the truck?

Yes. So now it becomes making 50 grand and your wife working, how quickly can we knock out a $12,000 truck loan? Well, basic math says if we do a thousand a month, it's gone in 12 months, right? Yes. And the good news is you're not paying for the biggest line item on most people's budget, which is rent or mortgage. And so once you get on that every dollar budget, this should be you guys trucking away on this, pardon the pun,

really, really quickly. And then after the truck, what's left is we're building back up that emergency fund. And this time, let's make it clear on what an emergency fund is for. We want this for emergency situations. It's not a sinking fund for gifts. It's not a sinking fund for something new that you want to buy. Your three to six month emergency fund is for things that are completely unexpected, completely necessary, right? And there's a time sensitivity to where it needs to be done now, right? Very urgent. Very urgent. And so that's what the emergency fund is for. And so George and I see a pathway where you're on the long side, on the longest side, you're out of this in 12 months, right? But your wife is going to start working. She's going to bring home two to 3000 bucks a month, right? So this is going to get knocked out more likely

six months. Exactly. And then you take another six months or so and save up the equivalent of what you had before, you know, $12,000 or $15,000, and you guys are off to the races. Then we're building for the future instead of paying for the past. Start investing 15% of your income. I'm guessing you have a TSP? Yes, I have a Roth TSP.

Perfect. Excellent. So you can start investing 15% once you're out of debt with the emergency fund, and then you have the emergency funds. You're never going back into debt. And once we're investing 15% beyond that, let's start saving up for a house one day. Love it. Maybe once you're done with this enlistment, we go, all right, we're going to set foot and park somewhere for a little bit. Listen, George, bankruptcy, it seems like a way out in a moment, but there's something about walking through the baby steps, which is what we just outlined, where that's where you change your behavior. The baby steps is where you decide, who am I going to be with money?

And that's what's going to set you up long term to make the right choices. This is The Ramsey Show. You're listening to The Ramsey Show. Thanks for rocking with us. I'm Jade Warshaw. Next to me is George Campbell. All right. We know that selling a house the Ramsey way can make home ownership a blessing instead of a burden.

And that's what we want for you. So the Ramsey Trusted Program is the only way to find an agent you can trust to keep you on track with what we teach here at Ramsey and get the best offer on your house or find the right house for you. We send you to some of the top agents in your area. These are people we trust. You get to review their stats. You get to interview them and ultimately decide which one that you want to work with. So these Ramsey Trusted Agents, they have years of experience and they're going to help you make wise decisions when it comes to pricing,

marketing, and making or choosing the right offer. Find a Ramsey Trusted Real Estate Agent for free at ramsesolutions.com slash agent, or you could click the link in the description if you're listening on YouTube or podcast. Really, really important stuff I tell people all the time. You can find a realtor. Please don't use your uncle who just got their license. Or even if a buddy is like, oh, you got to use this realtor.

He's a real shark, right? But if they don't know, if they don't do it the Ramsey way, then they might get you, you know, they might suggest things that'll pull you off the track and off the course that you're trying to go on financially. So that's what you want. Ramsey solutions.com slash agent. All right. We've got Jared Hughes in Charlotte, North Carolina. What's

going on, Jared? Hey, y'all. How you doing? Good. How are you? I am living the dream. I have a quick question. So my wife and I are recently married just back in August and we're in baby step two. And my question is, since I'm only 26, why should I stop, I guess, contributing to my 401k if I get to take advantage of all that compounding interest, you know, throughout the years, if it's going to take me a little bit to get out of debt. It's only like $150 a month. How much debt do you have? My wife and I have about $75.

Ooh, that's a lot. And what's your income? Collectively, right around $80. For household income? Yeah. Okay. How long do you think it'll take you to pay off debt? I think I can do it. I mean, I got three jobs, so I just calculated in the main job.

I don't really know what the side hustle is bringing in yet because, like I said, I just found you guys a couple of months ago. I don't know. I think I could do it in three years okay uh is your wife working at all oh yeah okay and so that's part of the 80 000 yeah yeah right around 75 okay um okay great so your initial question was basically why would I stop investing when I can take advantage of the compound interest to pay off debt? There's a couple ways we can tackle this. The first thing my mind goes to is, I want to be able to pay off this debt as quickly as possible. That's the thing that's keeping me up at night. That's the thing that's the weight in my chest. That's the thing that's causing anxiety, right? It's the feeling of I owe people money. I don't like the way that feels. And I can say that as a person who was in debt for quite a while. And in order to pay off that debt quickly, I need as much money at my disposal as

possible. Because here's the thing, if I'm going to be side hustling, if I'm going to be working nights and weekends and all of this, I want that stage of my life to go through fast, as fast as possible. And so having all of my income at my disposal to knock that debt out quickly, that's what I'm looking for. Focused intensity over time creates momentum. That's what we've learned here. And that's what I've learned personally. Just so you know, my husband and I paid off, I know you just started listening. My husband and I paid off $460,000 of debt. And when we started, we were making $30,000. And over the course of time, we were able to get the income up.

But we committed to saying, okay, we're going to focus on one thing at a time. The time will come when we're able to invest. And then once the debt is gone and we can invest, we can invest like 15%, which is far more than we would have been able to do back in the day. So in that way, you're kind of making up for lost time. But the key to remember and the key that I kept in my mind the whole time is this is just temporary. And for you, this is a two and a half year play at most, maybe three years at most. And so you're going to be able to make that up because what would you be investing right now? What percentage of your income? Just the basic, just 4% with my company match.

Just the match. And I'm trying to get you to where you clear out this debt. And not only is that the weight lifted off of your chest, it's out of your marriage. There's no more kind of elephant in the room, but now you can invest 15% of your income, which is pretty sweet. I mean, by that time, you're going to be 29 years old. You've still got 35 years to invest. True. So there's two pieces here. Number one, sure, we could try to do the math on what you could make in the investments versus the debt and the forced savings plan there. But I think beyond that, the psychological momentum you build from going

all in on one thing and the fire it lights under you to get out of debt faster, because I know you want to invest, right? You want to invest more than that 4%. I do. If you love compound growth, you want to invest 15% or more. And so that's why I love pausing because it gets you angry at your debt because it's stopping you from building wealth. And because of that, you're not going to go, well, could be three years. I don't know. It's going to go in 18 months, we're going to be freaking debt free because we're putting $1,400 a month toward the debt. Do you see the difference there? Yeah. And I don't feel the fire coming out of you to get rid of this debt. And so the problem is when we start doing a bunch of things at once,

we can get kind of comfortable. And when I paused my investing, when I was getting out of debt, it lit a fire under me because I'm a math nerd. And I was going, I'm missing out on the match. I'm missing out on future compound growth. I want this debt out of my life. So you see the difference there? Yes. So I think we can crunch numbers all day and try to justify why we should keep investing. But I think if you pause it, it's going to change your tune. You're going to sit down with your wife tonight and go, what is our game plan? I don't want to wishy-washy hope this is gone in three years. I want to know what we're doing. I'm going to go get a side job to get our income up to a hundred grand this year

because it's 20,000 more we can throw at the debt. That'll get us debt free in two years. That's the kind of momentum I want you to build. and just you know i i was just playing with numbers here so let's say when this is all said and done you're 29 and you start investing uh 15 of 80 000 bucks so you're you're investing a thousand bucks a month from the age 29 until age 60 you to have $2.5 million. Not bad. Now, where you're doing right now, you're investing, I don't know, 400 bucks a month. That's 150 plus the match. Plus a match. Yeah. This is just me round numbers. Okay. I'm not digging in too deep. But if you say, okay, I'm sacrificing three years, just the three years of you investing that, it's almost $17,000. And so I think that we can find a way out of 2.5 million. So just kind of looking at it, and this is really simple math,

but looking at it in just simple terms kind of lets you realize, okay, what's more important here? I'm not sacrificing all that much. And this is just assuming that this is the most money you ever make, right? And that's not true. Your income is going to go up. You're going to have bonuses and you're going to have lump sums come your way. And so you're going to make this up long term. This is very negligible in the long term. So I'm excited for you. I think you guys have a great future financially and good on you for clearing this out early on. Very, very good. Thanks for the call. All right.

I don't think we have time to take Matthew and Columbus. So close. I know it was so close. We'll get you on after the break. But George, we hear this argument a lot. There's a lot of people who are like, I just heard you in the break. You were watching someone on social media.

Someone sent me a video and said, you got to respond to this. And she was like, here's what the worst advice I ever got was to pause investing while i pay off my debt and here's why it was so great for me that and i'm going lady what are you what are you doing hope stealing from everyone telling them well you can do 17 things at once and it'll work out for you i think there is so much power in the gazelle intensity that dave has preached for 30 years and it's something that we've lost as a society

because we've just gotten comfortable just being mediocre at seven things instead of being great at one. I think that's a really good point. You know, we feel the need to wear lots of hats and we think that multitasking makes us very cool. But if you actually test it out, you're really not able to do any one thing well

when you do seven things at once. You only have so much income. And there's something about being able to actually complete something and check it off the list and say, I did that. No one can take that from me. And the reward of cleaning up your mess is you get to build wealth after it. And so there's a good, better best in handling money. And we truly teach you the best way to handle your money. We're showing you the shortest, most efficient, most risk-free path toward wealth.

And we know that it works. It's worked for 30 years. And it's worked for the people hosting this show today. This is The Ramsey Show. This is The Ramsey Show. This is The Ramsey Show, your scripture and quote of the day. Colossians 2.8 says this, see to it that no one takes you captive by philosophy and empty deceit according to human tradition, according to the elemental spirits of the world, and not according to Christ. Wait a minute. Let me read that again. See to it that no one takes you captive by philosophy and empty deceit according to human tradition, according to the elemental spirits of the world, and not according to Christ.

So basically it's telling you don't follow culture. Don't do what the world is telling you to do. Follow Christ. Okay. I just had to. Yeah, that was like the King James. Yeah, I had to use the old like the king james yeah i had to use my the old noggin for that all right margaret thatcher said don't follow the crowd let the the crowd follow

you i like that you know when i was in second grade i think it was first and second grade you were the trendsetter in second grade i imagine well there was a poster in the room that said in a world of followers dare to be a leader wow and i i still think of that to this day you know the little posters like the barney stinson posters those were great yeah and when a world of followers dare to be a leader little jade was paying attention let's get into it dylan los angeles ca what's going on in your world. Hello. So I'm 23 years old. I'm turning 24 soon. And I took a break off college due to the passing of my father. So I recently found out that due to a lawsuit surrounding his death, I will, as the beneficiary, be receiving an annuity payout of

$9,000 a month for the next 20 years. And now I'm really trying to figure out what I should do with one school and then two with the money because I was doing a pretty maybe unnecessary major, you could say. And now I just don't know if I should. I was majoring in philosophy, but the job I wanted to do was something online using YouTube and monetizing it that way, which doesn't really need a degree. So how are you paying for school right now? I was in debt. So I have like currently ten thousand dollars. I'm ten thousand dollars in debt. I was just going to a local community college and I have like almost two years done.

OK, so I'm sorry that this happened with your dad. If, if this hadn't have happened with your dad, do you think you'd still be considering quitting college? Um, well, I was thinking recently, like before this happened of whether or not I should change my major. But I mean, I've gone back and forth with college on the one hand, I think like, I'm not really getting an education that I can get by myself. I mean, I've gone back and forth with college. On the one hand, I think like I'm not really getting an education that I can get by myself. I mean, I've learned how to read really well through this degree, but it's kind of more of a liberal type education. And I just feel like I'm a Christian and it doesn't really go with my values.

So I don't know. I've kind of gone back and forth the past few years. Well, I definitely wouldn't continue on a degree path that you don't believe in and that you don't think you're going to use. So one check on that category. But if you say I could what I'd like to be studying is X, Y, Z, and that could really help me with this online business that I'm creating. I'm all for that. So I think that I think that is a separate discussion from the money discussion um because either way I think you need if you're going to get a degree it needs to be something that you're going to use and that you feel good about getting and it needs to be something that you can pay for

and not continue to go into debt for um so that's thing one George let's talk about this money this 9k a month for 20 years that's pretty wild I mean we're talking 108,000 a month for 20 years. That's pretty wild. We're talking $108,000 a year for 20 years. That's $2.16 million. It's crazy. Pretty wild. Do you feel the weight of that? It kind of feels surreal still. I haven't really processed it yet.

I started getting the first few payments, but it's still kind of hard it's hard to wrap my mind around for sure. Is there a lump sum option or is it only, hey, we're going to do 9,000 a month. That's the only way to get this. I believe it has to be a payer. Yeah. Okay. Well, I think you need to have a good team of people around you. And that might be, you know, an insurance broker, a tax pro, an investing pro, and a real estate pro. And you can find all those at ramsaysolutions.com. Just click on trusted services. But I want you to tread very cautiously and with a lot of wisdom because this is a lot of money that you're about to get and it's easy

to blow it. It's a lot of money. We would both agree on that. But it's also pretty easy to blow nine grand in Los Angeles every single month. It's also easy to lose a lot of money. We would both agree on that. But it's also pretty easy to blow nine grand in Los Angeles every single month. It's also easy to lose a sense of purpose because at your age, I mean, the reality, most of us when we're 24, that's when we're cutting our teeth

and we're trying to really dig into what it is that we want to do. And most of us are so motivated by wanting to create a life for ourselves that it causes us to go hard in the paint and now you've kind of got this money coming in and so it could be easy for you to go okay well i've got this 90 this 9 000 you can kind of like go back on your uh sit back a little bit and i i don't want you to do that i'd in many ways george you can chime in here

if i were in your shoes in many ways i'd almost want to treat this like it doesn't exist. I'd want to make sure I do the basic things like baby step things. I'm paying off my debt. I'll probably use some of this and put three to six months in a high yield somewhere as I stack it up. But then after that, I might say, okay, I'm going to keep a certain percentage of this, but I don't want it to hold me back. And I'm just going to invest the rest of it as though it were a lump sum. Because the truth is, if you were given the lump sum, which would have been what, 2.5 million, I think you said, George? 2.16. 2.16. What we would be telling you to do is basically the same things. Walk out the baby steps, pay off your debt.

If you're going to go to college, set out the amount that you're going to need for college. We'd tell you to put three to six months in a high yield. And then we'd say, okay, when the time comes and you want to do a down payment, we can keep that aside. And so we'd want to create a sense of normalcy in the face of an abnormal amount of money. Yes, absolutely. Are you renting right now or living alone? I live with my mom. Okay. And what's the financial situation of mom? Oh, I have a stepdad and both of them make really good money. I think our household income is over $200,000. Okay. And is mom getting any part of this settlement or is it just you? No, it's just me and my brother.

Wow. Okay. What does mom think about all this? Oh, yeah. She thinks it's really good. Honestly, I don't have to. She doesn't have to pay for my food and stuff now. She's like, all right, you're paying your own bills, dude.

You're on your own. Yeah. So I just did some quick napkin math for you. From 24 to 44, if you just invested this $9,000 into an index fund, a mutual fund, you would have 6.8 million at 44 instead of 2.16. So just think about that. I'm not saying you have to go invest all 9,000, but I want you to be very diligent with this and honor your father's legacy and maybe create generational wealth with this.

Yeah, that's a plan. Let it mean something. And so I would love for you to save up and maybe even pay cash for a house. I mean, you live in Los Angeles. If that's where you're going to live long term, housing costs a lot. So even if you put all 9,000 away, it's 108 grand a year, and you just save that, it would still take 10 years to get to over a million.

You know what I mean? Right. So I would really be thinking about what I want 34 Dylan to, what is his life like? And I love the idea of pretending like this money doesn't exist and creating a life where this money is just an extra blessing. This is just icing on the cake, and it's not this, well,

I guess I can just float through life for the next 20 years. You know what I mean? And I don't think that's you, but I also think as a 23 year old, I didn't know what I wanted to do at 23. And it sounds like you at least have a direction. And this huge traumatic life event has caused you to go, it ain't being a philosophy major. So I think that's a good sign. And I want to send you our friend Ken Coleman's book, Find the Work You're Wired to Do. It comes with a get clear career assessment. And I hope it points you in the right direction of what kind of YouTuber you want to be if that's where you end up going. Because YouTube is just a platform. So when you say I want to do YouTube, what does that mean? What are you going to do that you would do it

for free? You would do it on network television. You would do it in front of no cameras. I think that's how you find out what the thing is. It sounds cool to be in front of a camera. Well, you know, as much as I do, George, it's still a grind. It has to be something that you like we say over here, it has to be something that you can't not talk about. It has to be that big into you because you're filming it every day. You're

talking about it every day. But I love that. I hate that he lost his dad, but what a great blessing to be able to leave behind. And instead of people feeling the burden of the loss, they can feel a blessing in the midst of a really, really tough loss. So it's just another example of when you do things the right way, you can leave an inheritance for your children's children. And if my guy handles his money the right way, he'll be able to leave an inheritance off of this money. And so that's really what it's about, changing your family tree and building a legacy. Thanks for listening. We'll see you next time.

This is The Ramsey Show. We'll see you next time.