The Ramsey Show - App - "We're In $580k Of Debt At This Point"

Episode Date: January 14, 2026

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Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, this is The Ramsey Show. And I'm Rachel Cruz hosting this hour with my good friend and co-hosts of Smart Money Happy Hour, George Camel. And we'll be answering your calls, so give us a call. A-Tu-8-825-5-2-2-25. And we'll be talking about your life and your money. First up, we have Jimmy in Los Angeles. Hi, Jimmy. Welcome to the show.

Hey, Rachel. Hey, George. Big fan of y'all's. Thank you so much for what you do. I really appreciate everything that you guys do. And I've gained a lot of knowledge these past few weeks, learning more about what you guys do and how to kind of like financially plan my future. Yeah.

But I've kind of gotten myself into a sticky situation. and I'm just trying to see if I can maybe get some guidance on trying to find a way out. Sure. So what's going on? So late 2024, you know, I retired from the military. I served for 22 years. And earlier that year, I decided to open up like a kind of like a shop and where we just do like detail services, paint protection film, wraps and things like that. and it actually cost me a lot of money throughout that year. I'm sure.

How much? To the point, well, we're at a point now where we're like $580,000 in debt at this point. Okay. That first year, we took like a $220,000 loss. Admittedly, I think I hired too many people full time. Kind of went in too fast and too hard on that. And, yeah, it kind of really hurt me. So I had to take, like, an SBA loan to kind of get caught up and used a bunch of credit cards.

And then the year after, we netted, so just last year, we netted about 35% net loss. So we had another net loss, but it was a better net loss. And you're still throwing money at this thing. I'm still throwing money at this thing. I mean, it seems like you're kind of, it seems like we're kind of like making a way out of that. I mean, what's the stop loss here, a million dollars in debt, and then we'll call it quits? I mean, at some point, you just got to go, this ain't it. I would rather pack it up now versus try to, it's like a gambler where they lost a bunch of money in Vegas and they go back to go like, well, now I got to win even bigger to get out of this mess.

Right. That's so I was afraid of. and through this process, I kind of been, you know, a free labor. So I haven't been getting paid by my business. On top of that, how are you paying your bills through more debt? Do you have retirement through military? I do. Okay. What's that per month? My wife works too. Okay. I pull in about 5,500 take home per month from my military retirement. And then what does she make about, She makes about like take home $4,500-ish per month. Okay. So 10 grand a month is what we're taking home. And that's the hard truth is that's the number we need to actually pay down this over half million dollars in debt.

Right. What does the trajectory look like for revenue? It's looking positive because, you know, last year, I said, even though we had a net loss, it was a smaller, net loss and I think this year will be in the positive. But I'm struggling because like, I've been working for free for two years. Yeah. And digging deeper in debt. I mean, 35% lost. I mean, this is just a very expensive hobby at this point. This isn't a business. Even if it breaks even, this isn't worth it. No. Right. Yeah. Um. Jimmy, what, when you, when you project out, what do you, with all these loans, how much is the, is it half a million now or how much debt

in general? I'm just trying to, I'm trying to project out like what by, I don't know, in the next like month or two, like how much total debt are you guys in? So I've written everything down. So as it stands right now, on the business side, we're at $580,000 in debt. I know I have a PhD. and B and a bozo. How much of that's credit card? How much of that is small business loans? So,

$165,000 of that is credit. And then the rest is split up between the SBA, working capital, and a line of credit. Okay. Because I'm just thinking the credit cards, you know, if you get behind, those will be easier

to settle than some of these loans directly from the bank. What does your wife think? about this. What does she think you should do? She's not very happy with it, but she's been very supportive and very understanding throughout the process. So an absolute blessing to me. Definitely not an added stressor. She's been an anchor for me, for sure. Yeah, I mean, a little bit, Jimmy, but a part of me also is like, you guys aren't living in reality. Like, she should be kind of flipping out. Do you know what you mean? I'm like, I mean, I understand the anchor of feeling

supportive, but you're feeling supported and doing something that's continually getting you guys deeper and deeper into a problem versus saying stop, stop where we are and we're done, because we can't just keep doing this. And the problem, too, is that the guesswork for what you're possibly going to do this year, I mean, you know what I mean? It's like you can't, you can't predict it. And so you guys either have to say, we're going to try to stick this out for a year with no more debt, no more debt. And if that means we have to close up parts of the, business in order to do that, okay, to see if we can get some revenue in here. But you guys can't just keep digging yourselves in a hole and expect just to come out the other side.

Right, right. So I would sit down and you guys, I mean, you either need to make a decision. If you were to stop this completely, do you guys have things that you can sell off in the business? Like, is there any way that you could gain any of this money back if you were to close shop today? From like a real estate perspective or like, you know what I mean? equipment you have in the business. Yeah, I have about $50,000 worth of equipment, but I think that's tied up in the SBA loan. They would have to, you know,

I'd have to get permission to sell that off to pay that loan down. Yeah. And that's why I was like worst case, you know, I'd really want to avoid bankruptcy. It's definitely not my first choice. And I even thought about getting, like, a job. So I can just get some sort of income.

and then using that job to pay down this debt. But since it's a business, I don't really want to, like, create murky waters with me paying off business debt with my own personal income. It's all tied to you anyways, Jimmy. Go back to the papers. Look who signed it. It's you. Yeah, yeah.

I mean, they're all going to come for you. It's not like car detail or LLC. Well, they owe the money, not Jimmy. Right. It's guaranteed by you. And so that's the hard news is you have to now picture this. Like, it's just consumer debt that you took on. and so you're going to begin the business of cleaning it up and I hope that you can find a new job

that can create a better income that will allow you to clean this up faster but if you just even sell a 50 grand worth of equipment that's 10% of your debt you just knocked out and so you got to start making progress I would not sink more money into this thing just to be 600,000 in debt 650 and hope we have less of a net loss oh I'm heartbroken for you man thank you for your service to 22 years that's That's incredible. I hope you guys can climb out of this. Up next we have Caroline in Detroit. Hi, Caroline. Welcome to the show. Hi, thank you for taking my call.

Absolutely. How can we help today? Well, so I recently found out that my husband's been misusing his fund money to pay for communicating with a prison pen pal. Oh. Sorry, did you say prison pen pal? Yes. Like, is it a lady in prison? Exactly. Did he know her before she was in prison? No, I guess it was like some ads that popped up, he said, on a site.

So he got in this cycle and he stopped, but I'm wondering, how do I move on from this financial and emotional infidelity now and trust? Yeah. Did he come forward with it, or did you catch him? Like, where is he at with this? Um, so I, I caught him because I, uh, found some suspicious numbers on, on our, um, phone bill. And, well, he had been, like, broke all the time, like, just waiting for, you know, couldn't wait for that next, like, fund money to come, but had nothing to show for it. So, like, I couldn't figure things out.

But those, uh, yeah, I guess it's, it's a thing that people do. And he was kind of like trapped in it because I didn't know. So he couldn't tell me he couldn't, you know, do his phone number. I mean, he just. No, he wasn't trapped. He was willfully doing this on his own volition. Yeah, you're right. You're right.

Nobody, like, was forcing him to continue this weird prison pen pal relationship. How long was the relationship for? I'm embarrassed to say I didn't figure it out for three years. Okay. And it was the same. Yeah. Woman. Is this a scam or is this a real thing? Because it feels like a scam. So it actually is a real thing that people are doing. Like, I guess the purpose of it is to get people to get out and communicate.

So who's making the money? The prisoner? But he's paying. Exactly. So then they're, they use the money to put on their records or to buy things in their or who knows what else. Like, I'm not really sure, but it kind of like funds their money while they're in prison. Like commissary money? Yeah. That is wild. Okay.

Yeah. Well, that, yes. Okay. So, I mean, from the financial standpoint, Caroline, or you guys, well, sorry, let me just back up for a second. When you found out, when did you confront him about this? How long ago was it? It's been.

Probably in the past, I would say, four months. Okay. Are you guys working on your marriage actively right now? Are you seeing someone? Are you, you know, going to therapy? What are you guys doing? So I was going to therapy. And we also had the complication that we had a tree fall on our house.

So we were dealing with a hole in our marriage, a hole in our house. So even if we wanted to, like, get divorce, sell the house we couldn't because we're, and we have this massive hole, you know, going on. I was talking to somebody in counseling, and he did. I was ready to get divorce, and I just, hey, would you be interested in going, like, to church with me, you know, sometime? And it was only because of his reaction of, like, how excited he was to, like, try to go to church and know that I was, maybe there was a way that I was willing to, like,

To reconcile. Is he doing work on his own individually? Just like through the church and I know we're going to do a marriage retreat soon. Like I talked to him about counseling. He's willing, but he's just like, it's just so dark. And I told him like, I need this in order to. He said it's just so dark. Is that what you said? I'm sorry. He said, what was his response when you said that he needs to go to counseling? Oh, it's like the out, he's like it won't be good. It's just so dark.

His story, like what's in his head, like all of that? Oh, I think just maybe of like the whole truth coming out, like I maybe only know a portion of it. Okay. I wanted to know like what did this person go to prison for in my face? How long are they in prison for? You know, if you guys are going to move forward, everything needs to come into the light. Yes. Yeah. Yeah. Yeah. It's the only one. full, it's a full disclosure situation that you guys need to sit down with a counselor to even move forward. There's no way you, you can move forward with half the truth with your marriage. And

George and I are not marriage experts. If Dr. John Deloney were here, I think he would completely agree with us on that. So yeah, so this is a, this is a rebuilding because of how deeply cut the trust has been in the marriage, right? I mean, for three years. And in any given period of time, right? When a spouse steps outside the marriage, like, that is, that is painful. And that is, yeah, something to really, really be working on for both of you and the individual work for both of you. You having to learn to trust yourself again for him to face some of his demons and to understand what work he needs to be doing. I mean, yeah, there's a lot of repair that has to happen regardless of it the marriage survives. So I'm just saying individually to be too healthy people.

That's what you guys need. And then moving forward out of that, if you get the whole truth and you still decide, yes, I want to be in this marriage, then yes, then there's all the repair work within the marriage. From an emotional side, it's definitely going to take some individual work. And then I would say from the financial, I would definitely have, I would be separating finances. Does he work and do you work? Do you both bring in a paycheck? Yes. Okay.

And were you all sharing an account at the time when this happened? We were, but because we were working the baby steps, he was doing it with his fund money. So he just was going and putting. But the fun money, is it, is the fun money in y'all's checking account? Well, we would take it out cash. Okay, okay. So right now we're at the point that I'm like, in order for me to trust, your fund money is going to have to be tracked.

It tracked. 100%. Yes. Oh, I think that's totally fair. I would also pull his credit report and then freeze his credit on top of that. So we want to pull the credit report to make sure there's no outstanding debts that maybe you don't know about. And to get a clear picture of what's out there and then freeze his credit so he can't open. any new accounts. And that's just one stopgap to make sure that there's no more financial

infidelity outside of what's even in your checking account. Okay. But I would have transaction alerts set up so you get a text message. Every time as sent comes out of that bank account, you get a transaction alert, even if it's just his account right now if you separate. Yeah, because there has to be some steps, some visible evidence for trust to be rebuilt in the situation, Caroline. So that's not you being over-controlling or like being his mom, right? Some some marriages can function so dysfunctionally with money where like one person just has all the control and has to everything and the other one doesn't know any passwords all that I'm not talking about that this is there was a there was broken trust within the marriage money was involved in it as it usually is

and because of that in order to rebuild trust I have to know exactly where the money's going I need every account just like his phone records I need every account of your phone records like there has to be a level of of knowledge for you to keep moving forward in this marriage when it comes to building trust. Okay. And I know I'm really tempted. I know he didn't, you know, I know he didn't steal money from you guys and all of that, but because it was allocated to him.

But I, I mean, there's almost a part of me, until you know that the marriage is going to survive this, I almost would just have my own checking account, Carolyn. And then, but he has to be showing you his transactions out of his. but I'm just scared that something else is going to come up and you're going to find whether there's more on the on the infidelity side with the relationship or even more financially uncovering some stuff. Because you caught him and he still is not telling you the whole truth

and that's the scary part is we just don't know how much more damage there is. And so because of that, I would just be on the cautious defensive side right now to protect yourself. Okay. And then action plus time, plus counseling, plus God, that's going to be the only solution to rebuild this trust and restore this marriage. Okay. Yeah, I'm so sorry, Caroline. That is like, it's so heartbreaking, so heartbreaking. And what's wild are these calls, George, we get pretty consistently, whether it's a marriage that, you know, one of the two have, you know, made poor choices, but even from the financial infidelity side of taking. making money and doing things that the spouse didn't know about.

It's becoming more and more common. So again, yeah, the best line of defense, Caroline, is you work on you. He needs to work on him. And you guys moving forward with all the truth out to decide what are we going to do. Are you sick and tired of working so hard but having nothing to show for it? Well, that's normal. But also, normal's broke. So you don't have to live that way.

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Start every dollar for free in the app store or Google Play. All right. Let's head to William in Athens, Georgia. Hi, William. Welcome to the show. How are you doing today? Hi, we're doing great. How can we help? Okay, I am 63-year-old. I'm retired.

I am debt-free, home-on-home, and then, of course, my wife, she's got about 20 acres that we own, you know, we don't owe for anything. Good for you guys. And I have a large sum of money. I have never invested in anything all my life except my 10% to the lower. So I don't know what to do with this money I got. It's just sitting in a plain old savings account. Okay, how much money is it, William? It's a little over 400,000. $400,000.

Okay. And is that what you're living off of month to month, or do you guys have good retirement or Social Security? No, I have a pension that comes in every month, which covers pretty much all my expenses. which my wife still works, and, you know, she makes a good salary. So you guys are living off of what's coming in. You're not having to touch this $400,000.

That's right. It's just been setting out year after year, after year, after year, which now my pension check is going into my savings, and it's been doing that for like four years, and I've never touched it. So that's why it just keeps building and building and building. And I don't know what to do with it. Are you calling us because you're ready to invest?

now? It seems like there was maybe a fear or a hesitance to do that in the past. Well, you know, when you come up poor, you know you just always feared about taking big risks. So, but I had talked to the bank about, you know, maybe, you know, doing a CD. And then they talked about, well, maybe you can do another way and put it in an annuity. I wouldn't do that. That's just a more expensive product that. They gives them more commissions in their pocket. That's the truth. Right. Well, right. And that was kind of my concern because that ties it up for three years. Yeah. You know, so. Well, there's a way you can invest this money and have it grow for you, because the truth is there is more risk of it just sitting in a checking account than there is if it's invested wisely.

Because right now, inflation has been eating up that 400 grand for years now. Yeah, you're probably having kept up with inflation with a savings account because what you're, what you're making on that is what, less than 1% sometimes in some savings accounts? Yeah. Yeah. Yeah. So it's not even keeping up with them. So your money's actually kind of technically in value has gone down.

Yeah, it's gone down in a sense. So yeah, so investing, I understand William. Yeah, it feels, it feels risky. And I think there's ways that you can invest that is risky. And then there's ways that are very wise. And yeah, and the risk is just not there, right? So if you're talking about like single stocks, if you're talking about something like cryptocurrency or whatever, right,

there's some more definitely risky type ways that you can put this money. But also there's a lot that is actually very safe because you can look at the history of the fund and be able to somewhat predict, okay, if the U.S. economy continues to do well. And again, some years is down, some years is up, but it's not this like drastic change over time. And you can kind of, you know, you really can look at the pattern over time and say, okay, this one feels right. And if the U.S. economy all crashes and burns and you lose all the money, I think there's probably more problems that we're going to have than just thinking about, right, that money in the account. So, William, the first thing I would do is talk to an investment professional because what they can do is educate you and guide you. and you can do that at ramsysolutions.com, click on start investing on our website,

and that will connect you with someone who can help you manage this money wisely. You ever read The Parable of the Talents? And what is that? In the Bible, the Parable of the Talents. It's a great read. I highly recommend it. Go check it out after this, and I hope it encourages you to steward this money in a way that helps it to grow so that you can retire with dignity, leave a legacy, and even create

generation of wealth because if you just leave this money in an average mutual fund or index fund, it would double in seven years. So on your 70th birthday, there's 800 grand sitting there and you did didly. You didn't touch the money. You just left it. And William, I'll say this too. You know, we talked to some, you know, we talked to a lady, this was a few months ago. She was in her 90s and she was just scared to death to invest her money. I mean, it would keep her up at night. And I'm like, you know what? You're 90 years old. Solve for peace. If that's dressed at you out, you're fine. You know what I mean? But you're 63, William. You guys. a long life to live. You could easily be living another 30 years. So I would, yes, be very much

considering investing and go talk to someone that has the heart of a teacher, one of our smart vester pros, because genuinely you, and I want you to feel comfortable with it, okay, but I do want you to learn something new for how this money can actually, like George said, double in size, continue to grow so that you can leave an even bigger legacy versus living in this fear of the unknown. All right, let's go to, is it Esmeralda? Beautiful name. Sacramento.

Welcome to the show. Hi, thank you so much for having me. You're so welcome. How can we help? So I am a first time mom. My daughter is going to be turning one on February 23rd, and I am planning to go to Miami for her birthday celebration because all my family lives there and my husband, he doesn't have family out here in California. It's just us.

So I figured why don't we go to Miami to celebrate since my family out there haven't really had time to spend with her. The only thing I'm kind of wondering now is is it too much money? Is it even worth it with how much money we're making and how much

money we have paid? And would it be too late to cancel? Okay. How much is the trip going to be? Total. So for the flight I'm looking, we already paid for the flight, but we did get refundable. full tickets and that came out to a total of $637 and $0.92. Okay. And where are you guys at financially?

I have, I mean, we have $7,700 saved. And right now in my checking account, in our checking account, we have $1,300. Okay. How much debt do you guys have? Right now, it's only $200. It's from a T-Mobile payment that my friend at the time opened the account under my name. And we don't talk anymore, but it's just that bill, $200. We took care of the credit card debt when my husband said it was in today, Rams me. Good. Yeah.

So no car loan, no lease, no student loan, none of that. No, I didn't go to college. Neither did he, and he paid his car off with cash. Good for you guys. How much do you guys make a year? A year? Let me see. Just ballpark. 40,000 a year.

Okay. And is he just working? Are you home? Yeah, I'm stay at home. He's working. Okay. Asmorely, yeah, I mean, it doesn't bother. No, I mean, because that's all you guys are you're basically doing flights. You're going to stay with family, right? You're not going to have hotel costs or anything. No, we're seeing with family. Yeah. What does the birthday come?

consistent. Right now, we're paying, like, a car rental. Okay. And I was going to purchase any bounce house for her with the ball pit. And the car's parking. So when we drive to the airport, we can leave the car park there. Because we don't have family out here that could drive us. Sure, sure. Yeah, I mean, I would... And that came up to $1,000. Okay, so I would put this in the umbrella of like we're going to go see family versus making it a first birthday kind of thing because that almost is going to add more expenses from the emotional side. This should easily climb to two grand out of just, let's just have fun and let's get the bounce house.

I would just say we want to visit our family. So either you can do that now with these plane tickets. You've bought them already. And so go enjoy yourselves. Stay on a strict budget or just say let's pause and maybe go this summer when we feel like we have more savings in the bank. The Ramsey Show Question of the Day is sponsored by Y Refi. If defaulted private student loans have taken over your life, Y Refi can help you breathe again with a low fixed rate plan that fits your budget. Visit Y-refi.com slash Ramsey. That's the letter Y, R-E-F-Y.com slash Ramsey. Not available in all states.

Today's question comes from Kathy in Utah. I'm 70 years old and considering buying a house with a 15-year loan. If I pass away before the term of the loan is completed, what happens to the debt? I'm not married and don't have kids. Why shouldn't I borrow $500,000 knowing I may die before it's paid off? That's the spirit, Kathy. I mean, one, just integrity, I guess. That's a good start character. But the point of your question, if I pass away before the terms completed, what happens to the debt?

Well, your estate, quote unquote, would pay for it, which is any assets that are you. that you own, the lender would go after those first to try to pay down the debt as much as they could. And then I guess they would just take on the debt and move on. Because that is the understanding that when you die, your debt does not necessarily die with you to a point it does, but they will, yes, factor in all the assets you have. So if you did die with credit card debt, car long, you know, all the things, then you, you, you know, you technically have owed that money. So if you have any money to your name or any assets, yes, they are going to deplete those in order to pay the debt. And then whatever's remaining will go

to family of your estate. But again, you're not married. But at that point, the bank owns the house. So they'll sell the house for what they can get for it, use that money to pay off the mortgage. And so the bank just got a free house. So I think they might have got the better end of the deal. Yeah. But also, Kathy, what if you keep living, you know? I mean, you're renting at 70. I don't know anything else about your financial situation. Do you have a million dollars in cash? Are you broke?

We have no idea. But buying a house, knowing that you could live another 20 or 30 years, is a good bet. And so if you are in a financial spot to do it, I would do it. All right. Let's head to Dorothy in Manchester, New Hampshire. Hi, Dorothy. Hi, how are you? Hi, we're doing great.

How can we help today? I need to know if I should do an additional $20,000 on a he lock to pay off my car, which is at 12%, and I owe $23,000 and I have one credit card at $1,800 at $18. But my he lock is currently, I have $20,000 out on it because I had to have an emergency Furness. And it's only 6%. But long story tour, I went through a bad

divorce. It was homeless. Oh my gosh, I'm sorry. Lost everything. My ex- sold all of our joint bank account left me with $3. And I worked for the government for 20 years

and I had to retire. Move out of town. But the new job that I have is lower pay. But since 2019, I've been trying to rebuild. And like I said, I got a house. Well, I bought a condo before the housing market. I have $100,000 in equity. I bought it for $162.

It's worth now over $2. How much are you making now, Dorothy, with your job? $27 an hour. Okay. And what does that come? What does that come out to, like per month? What are you bringing home? Only like $4,200.

Okay. 4200, okay. Yep, yep. That's great. And that's enough to cover all your bills and cover the minimum debt payments? What I have is my loan is $1,223. My HOA is $300. My car payment is $464.

Insurance is $250. My lights are 100, heat, 100. TV, Internet, 128. and my phone is 45. So what margin do you have left after all of that? I've been making all my payments and I've been also making my $157 he lock

and I've been putting $30 a week toward my principal of my mortgage every week because $30 is you know, cup of coffees or whatever and that's all that I have is just that credit card and my car payment. Okay. So what I would say, Dorothy,

the secret of getting out of debt is not moving debt around and trying to get a better interest rate. The secret is you. So honestly, you kind of getting into this next year, which you've already made incredible progress, like the story you told us at the beginning of the call of, you know, being homeless. I mean, like, man, you're still standing with shelters, a miracle.

You have made huge strides. So, no, I would not take. I was driving four hours to work. working back. Yeah, yeah, that's a long time. So what I would say is the magic of getting out of debt, if there is, quote unquote, it's you. So you deciding, hey, I'm going to cut where I can. I may even take on an extra job. You have the work ethic. And I'm going to clean this debt up. When you move it around interest rate wise, over the long term, if you had this for 15, 16 years, then yeah, we could probably talk about it. But you can actually, you know, the short term life of this debt,

because you're going to pay it off so quickly, I wouldn't fool with it. I wouldn't full moving it around. And I think it kind of gives this false sense of security of, oh gosh, it just feels better that all my debts in one place or that it's a better interest right here and there. But again, that's not going to solve you getting out of debt. It's going to be you. It didn't change any of the behavior. We just moved it around and put it in a different junk closet. And the other thing is you're moving from unsecured debt to a secure debt. That home is collateral. So it puts you at even further risk. And so like Rachel's said, the solution is you, and that means we got to get on a written plan, we got to get on

a budget, we're going to save up a thousand dollar starter emergency fund to stop those ankle bite or emergencies. You have that in place. Do you have any other savings? No. Okay. What is the car worth? You owe 23 on it? It's brand new. It's a 2025. Wow. Well, that might be something you could sell for a pretty penny. Yes, 100%. Could you sell it for almost what you got for it? actually I got a three months of them so yeah I probably could because what I'm seeing is that clears your debt journey in half yeah because see then I could put everything of that car payment

and that's right you know so forth toward the the emergency of the helot from my furnished and stuff but I mean you'll still need another car to drive so you'll need to save up a little bit of money The new job that I have, yeah. The new job that I have, I live two minutes away versus four hours because, like I said, I was driving from Vermont to Portland, Maine, every single day working my eight hours and going back to back home. Gosh, well, that's not a sustainable life, so I'm so glad that it's close.

So you're seeing you can go without a car for a short season? I can actually go with, I don't even fill my car maybe once a month, maybe once a month, maybe once in a half. Okay. I'm just curious, Dorothy, what caused you, what caused you to buy it? Because of fact, Justi, I wanted to have a forever car where I pay this off and that would be it. Gotcha. Because I don't believe in leasing or anything like that. And, you know, where I only had just my credit card, but then that was it, the furnace added up.

Well, let me tell you, an 8-year-old, 10-year-old Honda Civic, that'll last you another 10-year-old. years while you save on the side and then you could upgrade that. That's a real forever car. Yeah. I wouldn't put the pressure on your next car to be a forever car. I really wouldn't. I think that causes this debt and this $500 payment a month now, right? It's easier to justify when you go, well, I'm going to pay it off and I'll have it forever. That's how we make bad decisions financially. And then when you're in the tactical side of your month and you're like, oh, crap, look at all this money going and look at how much debt now I've accumulated. So, so yeah, I would try to get out of this car, Dorothy, for sure. And it's bumping up against,

We have a rule that your cars should not be more than half of your annual take-home pay. And yours is there. You've got a $25,000 car making $50 grand. Yeah. That's tight. Right on that edge. So if I were you, I would. Yep.

I get rid of it. Go buy something used if you need it. But maybe for a season, like you said, if you really can go without it for a few months, save that car payments. You free up 500 bucks. Throw another thousand on top of that. Yeah. You'll be dead free in 18 months. 100%. Yeah. There's some moves you can make here, Dorothy, to really change it. But I wouldn't move the debt around in the heloc. I would make some big changes like what you're talking about. And I know you can because you have in your life and you're incredible. So we are cheering you on.

Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz hosting this hour with bestselling author and my co-hosts of Smart Money Happy Hour, George Camel. Honor to be here. We are here to take your calls. It's a little different than Smart Money Happy Hour. Different vibe. Yeah. We don't take calls on smart money. I know. The vibe is generally a little more positive and upbeat. Because people aren't going through crisis on that show.

That's why we're here, though, for this show to help you with your problems, to celebrate the victories. So give us a call at AAA 825-5-2-2-25. All right, to kick us off this hour in Salt Lake City, we have Phil. Hi, Phil. Welcome to the show. Hi, thanks for having me. Absolutely. How can we help today?

Well, it's recently come to my attention that my oldest brother has been stealing money from my parents. Oh, go. What started off as borrowing gas money has turned into lying his way into a massive car loan in my mom's name, stealing credit cards without my parents' knowledge. And so my parents have more than $100,000 in debt now. And that's not even including their mortgage. They're both almost in their 70s. my mom's on disability. My dad has 40,000 in his 401K, and they think that's a lot. And I'm just,

I just don't see a way that he's ever going to be able to retire. And I understand that me and my life are not financially responsible for them, but I'm trying to walk through this with them. But I'm no expert. And every time I learn more about their financial situation, I see less and less of a solution other than bankruptcy. And so what should I tell them to do? Yeah, so two different paths. I mean, if you're going to go like full on, he has stolen. Did he, um, did he forge signatures like for the car loan? How did that happen? So from what I could gather, it seems like he's lying to my mom on what she is signing and

then gets her to sign something without her reading what it actually is. Well, crap. So if they took this to court, they'd like, ma'am, that's your signature, right? And she's like, yeah. But I just didn't read the document. And that's her fault. I mean, to a degree. I mean, do you know what I'm saying?

Like, there's a level. of responsibility that she did not take. I mean, it's really elder abuse is what this is. That's probably your best case. Exactly. Is fraud and elder abuse? Yeah, if they would, yeah, if they would take legal action, that's what it would be. But I'm scared for, I don't know.

Yeah, I mean, first, I would freeze their credit yesterday so that no more accounts can be open. I already did all that. I would also contact every lender on that credit report and say, hey, this was fraud, this is elder abuse. This guy took out all of these loans without the permission. You know, he basically coaxed them into it. And so then we go from there. I mean, do they still have contact with this brother? Do they know about this?

They know about it. My mom just had a stroke last week, so this is all adding to it. Oh, goodness. Oh, my gosh, Phil. This dude is like the scumburger of all scumburgers, to this to his own parents. Yeah, and we're trying to find him right now. He's been on Crystal Meth before, so I'm not shocked if this is. having that involved again.

So we're trying to find him and figure that out because he has the truck. He has, there's also an RV that has $250,000 on it that I think is in his dad's name. It's a whole ordeal. And I'm worried that my parents aren't going to file any kind of charges. Yeah, they may not. It's hard to. How do you do that to your firstborn son? You know, I get that.

Well, I think they need to understand. If they don't pursue this, then they might just be on the hook with us for the rest of their life. Yeah. That's the scary part. And so, and it's a loan, Phil, right? So the problem is, too, yeah, so if he stops paying and that truck gets repoed and all that's in your mom's name, I mean, it'll all be on her, they're going to come after her for it. Is he even making the payments? He's not made a single payment, no. So, I mean, are there, have they repoed this? I guess you don't even know. He does still. he does still have the truck.

Not for long. I mean, yeah, I don't know how long he's going to have it for, but like, I'd call the repo man myself. Yeah. If you can find him. So he disappeared? Well, he turned off all of his location services once he figured out that I knew. You're on to him. Have you followed the police report?

I believe, I've told my mom that she needs to. I don't know that she has yet. I actually found his location this morning through his daughter. And so I'm trying to figure out what I need to do. Okay. So the hard position you're in, and correct me if I'm wrong, it sounds like you are doing all the proactive work in this situation. You're worrying about your parents.

You're trying to find your brother. You're telling your parents what they should do. Like you're kind of the one heading up all of this. And none of this is your issue. I understand it's your parents and you love them. So like I'm just saying from a top tier perspective, the hard place that's going to happen for you, Phil, is you're going to have a wonderful logical game plan

because you're a smart, reasonable person and you're going to say, mom and dad, you need to do A, B, C, and D. Brother, they're coming after you for these charge and this and this and this is going to happen. You're going to have a plan laid out of what should be happening and in any common sense scenario.

And the problem is if they choose not to move forward, that's their fault. You know, that, that's their decision. It's not yours. And you can't make them do something or even convince them to change their mind.

So I think it's going to be a discouraging situation for you, Phil, here in the next few months, because I think you're going to realize my parents are probably naive because he's been on drugs and still are signing papers for him, right? I mean, like, I would be going through, you know, going through like,

oh my gosh, so detailed if that was me. But, they need to be as, angry as we are. And they're not. And they're just like, well, I guess it is what it is. Like, what is their response right now? What's their attitude? Well, I mean, my mom feels horrible that she didn't see this coming sort of thing, but she doesn't really have the health to take this on. And my dad has not done anything financial in their entire marriage. He just doesn't know anything

about it. He doesn't want to know anything about it. And I'm like, I know that I'm going to have to, you know, that eventually most of the. the time. They sign off their finances to their children to take care of them. But I'm like, they haven't done that for me yet. So I can't, I can't do anything about it. So your dad is just sitting there. Well, all this is being, I don't know, I don't know that my dad even knows to the extent of how much debt he has. He just goes to work, makes the paycheck, and comes home. That's all he ever does. Yeah. Yeah. My mom has always handled the finances. And now she's, she's learned about some of the stuff in the past and hasn't told my dad about it. And now it's blown up to way more than I thought

it would ever be. Yeah. How much debt to are they in personally besides all the stuff that your brother brought in? I would say not including their mortgage. They probably have anywhere from like 15 to 20,000. And that's a car loan and various credit cards. Okay. And how much are they making a year? I don't know exactly. Yeah. But my guess would be anywhere from like 60 to 70,000 because it's just my dad and my mom is on disability. Okay. Yeah. Wow.

If you're going to be involved, you're going to have to get financial power of attorney to actually make any moves. And that might be wise based on how things have been going with your dad not being involved, mom had the stroke. I think now's the time to have some really hard conversations about the future. Yeah. So I think Phil, I mean, because I feel that burden, right, in the sense of like, you see what's going on and they don't.

So I almost would just have a meeting, sit them both down and tell them, hey, this is exactly what the situation is. I need to know numbers. I want to be able to help you. And let's make a game plan. And then it would be up to them to be the ones executing it unless they want your help in doing so. But I mean, I would give a last ditch effort to try to do what I can to help them see and know what's going on. But unless they give you the power to do something, they're going to have to be the ones that, you know, make those decisions.

And I don't know if they will. And that's hard. It's very, very hard. All right. Let's head to Dave in Charlotte, North Carolina. Hi, Dave, welcome to the show. Hi, thanks for taking my call. Yes, how can we help today?

So my wife and I are planning on to retiring between three and five years, and I just feel with our total portfolio that we're house heavy, we always had planned on downsizing once we retired. But I'm wondering if you think we should do that now and then invest that extra. money. Okay. Yeah, how much, how much is the house worth? Six-50. Okay. And how much mortgage do you have left on it? It's paid off. It's paid off. Okay. And how much do you guys have in retirement? Well, it's $6.50 right now. $6.50. Okay. And how old were you guys be in five years? I will be $67. She'll be $65. Okay.

What's your game plan currently to retire? Because the house obviously is not going to produce income in retirement. It's great to have it paid off, and I'm proud of you guys for doing that. But what's your current game plan, regardless of what happens with the house? Where we're going to get our funds from? Yeah. Well, from the 650, which will grow, plus I have a small pension and then our Social Security. Okay. So between pension, Social Security, and then on top of that, you'll dip whatever else you need.

You can dip into that retirement nest egg. Right. Okay. And you're saying do you have too much tied up in the house? Are you guys wanting to downsize anyways? Yeah, we always planned on downsizing and then maybe we could clear 600 on this and I know I can find something for 400. So that gives us 200,000. Mm-hmm. To throw in there. That would give me some, you know, some cushion. And so I would be doing that if you're going, hey, I don't know that we can make it for the rest of our. life with this nest egg plus the pension and social security, I think it would be wise to sell, use any profits to invest to then create a little mini nest egg on its own. Do it now versus wait until we retire.

I mean, you can wait. You'll, you know, either way, the house is appreciating, right? As time goes on, your nest egg's appreciating. And so it's okay to wait. This is not, I wouldn't say this is on fire, but the sooner you do it, the more, the less variables you'll have. you'll kind of have more on paper to know when you can retire. Sure.

Okay. Great. That makes sense. Yeah. Dave, how much will you guys be getting in a month with your pension and Social Security? At that point, for 52, 62, about $7,000. Okay.

And how much do you guys need to live off of per month? I think we figured 84, so that would be about that. Okay. Yeah, yeah. Well, that's great. Yeah, I was going to say because, you know, when you do just the quick math, let's say you added 200,000 to that, that would be $850,000. And you just think every seven years it doubles if you don't touch it, which you guys will be retiring in five years. So it's a little less than that.

But when you'll have upwards over a million for sure by the time you guys hit retirement age. And that in a paid off house. If you're taking out, you know, your 18 grand a year to float the difference, you're talking 1% of your nest egg. And so it's going to grow in perpetuity. You know, the balance will continue to grow. Yeah, you guys will be good. I'm not concerned about that at all with your current plan. Right.

And if you love the house, you could probably stay in it and still make this work. There just might be a few sacrifices down the line. But I think you guys will figure that out. The pension of Social Security. That's awesome. For sure. Absolutely. Thanks, Dave, for the call.

And well done. Well done. I mean, yeah, right there, baby steps, millionaires. You know, they did it. You can retire. It's awesome. with a paid-for house and some money in the bank. So great.

All right. Let's head to Isabel in Spokane, Washington. Hi, Isabel. Hi, guys. Hello. How can we help today? My question for you guys is I'm on baby step number two, and I have about $6,900 in credit card debt and $9K on my car loan.

And I'm wondering if I should take all of my investments in stocks, which total to be about $6,800. and pay off my credit card knowing that I don't have any retirement at this moment. What are the stocks? Are they in like a 401k or your Roth or is just single stocks out there, the 6,800? Just single stocks that total up to 6,800. Okay. Yes, I would.

I would cash those out because how old are you? I'm 25. Okay. Yeah, you have plenty of time for retirement and the $6,800 is going to be better spent. value-wise by getting you out of a whole financially and helping pay off this debt. And then you'll be building up an emergency fund. And then, Isabel, you'll start investing 15% of your income, which I think you're going to be able to do here in the next, you know, 18 months, two years. What's left on the car loan?

Just under 9,000. Okay. So you've got 16,000. I make roughly 63,000 a year. Amazing. Yeah, so after you cash it out, you'll have to pay some taxes on some of it. But, you know, let's say you, you know, could pay it off and you're around 10 grand. You know, you could make it a goal to pay off that 10 grand in, golly, five months. Yeah. You know, four months.

Get aggressive. Get an extra job. Pay it off. Then build up an emergency fund. If you're, are you single? I am. Okay. Yeah.

So I would just do a three-month emergency fund. Whatever your expenses are, just multiply it by three and just say, yep, that's my emergency fund. And then when you start investing is about, If you start investing by the time you're 27, 28, it's going to be unbelievable. Let's say, let's say pretend that, yeah, George is getting his calculator for us. So let's just say you stayed at $63,000 a year, Isabel, which you won't. Your income will grow over time.

So you're making an amazing income right now. That's going to be, what is it, $6,000. That's $9,400 a year, $7.87 per month, is what you would be investing. say by Christmas. If you can get through this plan, get rid of all the debt, get the emergency fund, then you can begin investing. You have zero in retirement, right? Correct. Okay. Get ready for this. Let's go, should we go 26 to 60? When do you turn 26? In August. Perfect. Okay, so it'll be 26. So 26 to 66, you would have $5 million. And that's based on a 10% return, which is what we've seen in the stock market for the last several decades. Okay. Yep.

So you'll have five million bucks, Isabel. You'll be great. And if you want to retire 62, you'll have 3.3 million. Okay. And that's if your income doesn't go up. That's if you never get a raise your whole life. That's crazy. Like that's so wild.

And then you're going to maybe meet someone. You're going to double the income. You know what I mean? You just keep it going. There's life goes. Get a house, get the house paid off, invest even more. So you're going to be a multimillionaire if you stop playing the game of a broken financial system, which is, I got to get a credit card to get a credit score. Whoops, I carried a credit card

balance. Well, I guess I need a nice car. I have a big girl job now. I got a payment to go along with that. If you can just put blinders on and not care what anyone else thinks about your financial plan, you will be unbelievably wealthy. Awesome. Well, thank you guys. Absolutely. Well done. Yeah, that's always, it's always an encouraging call when you get someone in their early 20s and you're like, look. You still have so much time. You have so much time. I mean, seriously, like it is, it is wild and not that, you know, those of you in your, you know, 60s and 70s, like, start now, right? If you've not started, like there's always the point to start. But especially young people out there in your 20s, man, the idea of compound interest is insane.

Like the amount of money that actually went to principal, does it say that, George? Oh, that shows you how much she contributed. So, like, we'll go with our example, 26 to 66. So a 40-year period of you investing, that's 787 a month, in that she would contribute 300, 77,000. That's how much of her own dollars went in there. And the growth was 4.6 million on top of that. So that's what's crazy. So the earlier you start, I mean, honestly, it's, it is wild. But it does. Over 90% of that nest egg was her just investing and leaving it alone. Yes. And George, you know what? It's the consistency. Month after month, regardless, we are doing this. We're not letting up. It is just a rhythm of life now when you get to that point. It's just part of it. You don't stop. and that, you know, you don't get caught up.

I don't think in all the lifestyle creep and all the things, you know what I mean? Like there's so many things that can take you off this plan that look shiny and fun and exciting. And you can still have a great life while doing this. But it's just having the maturity to say, you know what? I'm going to put some things in place to assure that when I am in my 60s, I'm taking care of. And by me, not by the government or waiting on something else that you do it. And you have the power.

Everyone out there, you have the power to do it. The fun of doing a live show is your co-host may spontaneously jump in the control room and make faces and all of it. And then you say, you know what? Actually, get in the studio. Ken Coleman. Oh, you're telling my secret. Welcome. Our special guest and correspondent.

Yes, to be here for this segment. And it's actually a perfect segment for you because something hit the news recently that we were going to talk about. In the news. Yes, CBSNews.com reports that Trump. has floated a 10% credit card interest rate cap. So here's what this could mean for consumers. So Trump came out and basically was like, hey. On truth, social.

So this was not like an executive order. This is just him on social media making the post. And he's saying credit card companies should just max their interest rates at 10% because now we can go, I mean, as high as 36%, right? So it's in the 20s. I mean, like, it is what? It is what. It is wild.

APR right now. Yeah. So it is pretty wild where it is. All right. So here's what this could do. Vanderbilt Research found that a 10% cap would save Americans $100 billion a year in interest. I mean, think about that. The nation is $1.2 trillion in credit card debt.

That's wild. So 10% means the credit card companies will only make $120 million off consumers this year from the interest alone. Yeah. That's not swipe fees. That's not annual fees. So let's do the math. You've got a $5,000 balance. You'd pay about $42 a month in interest at 10%.

But at 24%, which is close to the average, $100 a month. So that really would help a lot of Americans who are struggling with this credit card debt. Yeah, but the reality is. Let's go to reality now. But reality is, he can't do that. You can't just truth it into existence. Nor should he. This is when presidents decide in free market economies to start doing things like this

and forcing free markets to do things, you get Venezuela, you get Cuba. everybody just needs to understand this all sounds good until you look at the constitutionality of it. Is it a free market policy? That's first point. But I tell you what came to mind when I first saw this. As you guys know, I play a lot of pickleball. I play for three hours tonight. Thankfully, my knees are in good shape. But the knee analogy came to mind when I heard this. If someone has a torn meniscus, you can get away with not having surgery and you might put a knee brace on. the knee brace is somewhat helpful. So George, you just laid out beautifully how 10% at a cap would be very helpful. I don't want to gloss over people that are hurting right now. I don't want to be insensitive.

So it's like a knee brace. Yeah. But here's the thing. The meniscus isn't going to heal. The knee brace just helps a little bit. It doesn't solve the problem. And this doesn't solve the problem, which is Americans have a taste for debt. And it's not going to solve the problems. The debt snowball solves the problem. The baby steps solve the problem. Lowering your interest rate doesn't solve the problem. How many times do we get a call? I'm like, should I move my debt around?

So for that reason, this feels like politics to me. And he has every right to tweet or truth or whatever he wants to do. I think it's posturing. And I did this when Biden was president. I don't care who the party is. I'm going to call strikes. I'm going to call balls. And this isn't going to solve the credit debt problem.

It's just not. Well, that's a good reminder. This is for one year. So this cap would exist for one year. So then what? It's not law. It's not even executive order. He can't do that.

It would have to be Congress rewriting federal law. There has to be a bill in place. Everyone has to agree. Which I'm for that. If Congress does it. And we're talking about banks which make billions and billions of dollars. They're going to find a way to get their money. Well, what they'll do is raise annual fee.

They'll fee you to death. Yes. And they'll make their money elsewhere. Banks are not like, oh, you're right. You know what? That would help people. 10%. We didn't even think, we didn't even think about that. Thank you, Trump. You're so right, Rachel. You know, they have lobbyists. They have the best lobbyists in the world. Do you think that

legislation is going to pass? No. And of course, here's the best part, J.P. Morgan's CFO. Of course. You're saying, this is going to hurt people, guys, we can't do this. It's going to hurt people who need credit the most. Because what this means is tighter lending. These credit card companies aren't going to lend to the subprime borrowers. And so he's saying it's going to actually hurt everyone. Oh, you two are going to love this one. You're going to love this one. I saw this on a Twitter. By the way, I refuse to call it X. Thank you. Somebody came out, the day that this came out, I saw this, they were like, well, what

people don't realize is, is if they lower that interest rate, where do you think all the points come from? It comes, which is right, by the way. Yes. The points system is built on people who aren't paying their debt off, and every month, they're paying 22%, and that's where the miles and the points and all the things. They're going to slash rewards, devalue your points. Guys, the banks are smarter than you. There's no free lunch.

You've ever heard that phrase? Yeah. Yes. There's no free lunch. Yeah. The only way to make this better is to pay off the debt, like we preach. Is to get rid of it. It's so true.

Here's a fun fact. Credit card rates are protected under federal law. It's called National Bank Act. It's locked in by a Supreme Court ruling from 1978. And what this does, the ruling, this is crazy. It lets banks charge whatever rate is allowed in the state they're based in. So guess where credit card companies go? Delaware and South Dakota, where there are no rate caps.

So they can just go. It's like a loophole where they go, we can charge 36%. So Delaware and South Dakota are the only two states in the country where there are no caps. No rate caps. And that's where all of the credit cards. And the president can't override that without Congress rewriting federal law. And so there's no bill right now, which means it's just a thought. And the reason that passed in the 70s was, what, to give the free market and the banks to be able to have a free market economy?

I do know what you mean to. I do know what you mean. The reason I'm pausing is I don't want to misspeak. Yeah, yeah, yeah. because I'd have to see, we'll have to look in. The historian. I always assume Ken honestly has any answer to any history. He's all right.

Any legislation. I appreciate that. Well, in theory, I can say that this is where lobbying comes in. And the bank's convinced Congress. And, you know, I mean, that's why we call it lobby. Here's another dumb question. If that is just platforming, if Trump really cannot do that by law to go in and do, what causes him to come into the headlines and to throw it out there just to stir the pot?

The same thing when he says and winks, wink, wink. and says he might run for a third term. He says whatever he wants to say. He's a showman, and so that's part of it. But I'm just saying, was there something else stirring that he's like? Yeah, the midterms. Going to be going to be. The midterms.

Okay, let me tell you this. The number one buzzword in politics in America today. You guys know what it is? Tell us, Ken. Affordability. Oh, yeah. Both sides of the aisle. It is going to be the issue in the midterms.

And so presidents do this. I don't begrudging for it, but that's why he did it. By the way, it was probably three in the morning. He'd probably just had a filet of fish sandwich, you know, brought to me by Secret Service. A guy never sleeps. Yeah. You know what I mean? He's an hour.

And so he just gets on truth and he's like, oh, this is a good idea. Let's stir some things up. Let's just see what happens. What should be? Anyway, this sounds good. Yeah. And, you know, and I will say from my seat, the banks do screw people. But also, we have chosen as a country, as a consumer base, to get into this amount of debt, right?

Nobody, that's right. Nobody tortures you and forces you to sign for the car loan or the credit card or whatever, right? We as adults, if you're over 18, have chosen to put your signature on something. That's true. I don't begrudge to the banks. You know why? The banks are just like the guy in the kiosk in the mall where I'm walking by with my wife.

He's like, hey, hey, hey, hey, hey, hey, hey. Try this. And you have every right to just pass by him. And I can ignore him or I can stop and get sucked into it. And then the whole, let the whole spiel sell me on whatever it is he's selling. face lotion all of a sudden. There you go. I want to say this, I'm with you.

A new key chain. But like you, I'm validating your point. Banks aren't bad. Banks are in the business of making money. Yeah, but they do pry on P. They know, they know the tactics. I agree. But I'm saying we, let's get some personal responsibility.

Right, right. Which is, yeah, what I was saying. By the way, Trump threw out the 50 year mortgage too. So he's just throwing stuff out there. Just to see what sticks. What was the math on that one that you did? It would be like a million dollars in interest or something. What was it crazy?

But you essentially never pay it off. The principal doesn't go down until you're 41 years into the mortgage. You're just paying interest. That's when more is going to principal and interest. 41 years into a 50-year mortgage. It's crazy. So, yeah, folks, I would say don't get your financial advice from presidents and or the banks. Take away.

I would pay my credit cards off today and cut them up versus waiting and hoping that maybe the rates will go down. And so hang on. The banks, they don't care about your financial piece. No. And that's fine. politicians, they're not going to solve your debt problem. And the system is designed to keep you dependent on lenders and on lawmakers. So the best part is, you don't have to be dependent. You can break free from the system and just say, I'm going to use my own money. What's in your wallet,

George? A debit card? I thought you were going to say cash. And cash. It won't fit. Ken, thanks for jumping in last minutes. So you guys are the best. Thanks. Buying or selling your home is a big deal. And you want an expert in your corner fighting for you to find the best deal for the right price. And the Ramsey trusted program is the only way to find a top agent you can trust who will help help. Help. Just a little, my little southern accent comes in there. Make your home a blessing, not a burden. It's easy. You just can compare agent profiles, which I love. So you can look at different ones, see what people are saying, look at their, profiles, interview them, and then choose the right one to work with. To find a Ramsey trusted

real estate pro for free, go to ramsysolutions.com slash agent or click the link in the description if you're watching on YouTube or listening on podcast. A little Sharon Ramsey snuck out there. Help you. Rachel. Just a little help. Oh, you know, you can take the accent out of the girl. I just can't take, well, or the girl.

Whatever they say. Yeah, whatever that's saying is. All right. Let's head to. Is it Allie? Would you go Allie? Or Ali. Or Ali.

In New York, New York. Yes. Hi, Ali. Welcome to the show. Thank you. Thank you for taking my call. Absolutely. How can we help today? I just have a simple question. I run a limousine company here in New York, and I have a lot of independent contractors. They work with me. They have their own vehicles. So I have right now only one driver that drives my car, which lowers my expenses.

But the question I wanted to ask is, if it's okay. for me to buy another vehicle and hire another driver, which is going to obviously, you know, add another car payment and the insurance and the drivers pay on my payroll. So that's the question I'm going to ask is, should I keep using the independent contractors or, you know, buy another vehicle and hire my own driver? Yeah, well, if you're going to go through the avenue of debt, oh yeah, I would say, yeah, no. I would say you're not financially ready to do that because, a financial perspective, even with small business, we always say move at the speed of cash. If you have the cash in order to do it, if you have enough revenue profits coming in that you

know, okay, yes, I have the ability to pay someone full time, save up for a car. Like all of this is going to be streamlined. Then yes, I would. Until then, I would not. But I think that could be a great, you know, next milestone for you. Because I do know, you know, the car service, you know, world in New York. I know it's, there's a lot of neat out there, right? There's a lot of people that use car services. So I do think that your ability to make money is there. And I just wonder if you make it more of a goal than like an urgent implementing something quickly.

Yeah, because I was doing the math, it's going to add at least 10 grand on my, you know, monthly, including the, you know, drivers pay and the car payment and the insurance. So $10,000 monthly is going to add. That's the expense. for you?

For one adding, yeah, because the vehicles we use is a Cadillac escalate SUV. We buy a lot of high-end business executives, and we did around $1.1 million last year. Is that top line? Gross? Yeah, that was the top. Okay. What do you take home from the business? Approximately $350 to $400.

Oh, amazing. Okay, Ollie, hit me straight. Couldn't you save up and buy one of these in cash? buy when used, get a deal, and then it's pure cash flow? Yeah, I mean, the one thing, I think the only option I'm going to have to go to, as you just said, maybe you have to save money to buy the car because we, if I buy a used vehicle, what's going to happen is they won't give us the warranty, which is 150,000 mile warranty.

We normally get when we get a new vehicle. So, because, you know, we run these cars for a long time. We put a lot of mileage on it. So if I buy a used one, it's not going to have that warranty. Sure, but you could self-insure at this point with the business. I mean, you can create your own warranty fund and put $500 a month into a pot and go, right, we're going to cover maintenance and repairs with this money instead of paying the fees for the warranty. Because what you're doing is you're destroying these vehicles by using them for business,

which means you're likely underwater on that car pretty quickly. You owe $60,000, the car is now worth $40, because you're you're going to be able to. you already have 100,000 miles on it, whatever it is. And so it's actually putting you at more risk by buying those cars with a loan. And so I would encourage you get a deal, buy one used. They're still nice cars. Yeah. Even a five-year-old escalate is, I'm not going to go, well, it's not a 20-25,

so I'm not going to ride in this vehicle. You know, it's about the service you provide. It's clean. It's clean. Smells good, right? I mean, it's all that. And so if you run this, do you have any debt tied to the business right now? Yeah, right now the only debt I have is the, which, you know,

You know, we have brand new, two brand new vehicles. It's close to 130, $130,000. Okay. How quickly could you pay that off? I can pay that off, I would say, within six or eight months. Cool. Amazing. Think about that, though.

If you got rid of all the debt and then you began to cash flow any future vehicles, run the numbers on that. And not only will I think you're going to go, oh, my gosh, this is amazing. Yes, it's going to take a little bit of delayed gratification right now and sacrifice. But the long term is you survive in this business 10 years from now because everyone else is over leveraged underwater on their car loans. And you're going sweet. I got six escalades paid for in cash. Yeah.

And what's crazy, Ollie, is George and I, we were in New York City, March of 2020. Literally the day they were shutting down Broadway, all of it, because we were there for a media thing right when COVID hit. So my thing is, too, you know, whether it's, you know, something like that. I mean, who knows what could happen where everything just stops, right? Business for you guys in 2020 through 21 probably just. ended, right? I mean, it just was done. And so there's still a level of, yeah, a level of risk that you carry when you carry debt. And especially since yours is so dependent upon, you know, other people and even, you know, I don't know if it's just execs that you guys, you know, do this car service

for or other people. But there's something to be said that if for some reason, business just stops when you don't have debt, you have a lot of peace, a lot of peace. Thanks for the call. Ali, I hope that helps. All right. Let's head to Ethan in Columbia, South Carolina. Hi, Ethan. Welcome to the show. Hi, guys. How's it going? We're doing well. How can we help today? Well, it's kind of a compound question, but I'll keep it brief. My fiancé and I are going to get married in June.

Yay, congratulations. Thank you. Thank you. It's been a long time coming about a two-year engagement. Oh, good. Yeah. So we have our name and paid for. We have our wedding paid for, just a couple of expenses here and there. But we're wondering, should we, rent first, should we buy first? We have an opportunity to live with family, but I'll explain more of that in a bit. Okay. Yeah, my kind of go-to answer usually, Ethan, is if you guys are not,

if neither of you are homeowners right now, is that right? Correct. Okay. So yeah, starting off like that, I would definitely just rent, rent for a year, get settled, get an apartment, like just kind of just, you know, have that, save some money. And then when you look up and say, okay, we do have enough to put a down payment, you know, which is 5% for first-time home buyers is what we recommend on a 15-year fixed rate. And mortgage, you know, and it may take you longer than a year to save, depending on where you guys are financially, you know, what you guys can put away. So I would not buy a home until you have that until you're financially ready. So in the meantime, I would be renting. But even if you were financially ready, there is still part of me, George,

and I'm like, you know. Still wise. Yeah, just rent for a year. I'm curious, Ethan, I see the word debt on my screen. How much debt do you guys have? We have, I did the math while I was on hold. It's right at $89,000. Oh, I didn't realize that. 36 of that is student loans for me. 30 is student loans for her and then 23,000 on a vehicle I used. Okay. What's, what's going to be your household income once you guys are married? For a month or total? Total per year. Total per year. I currently bring homes around 70 or 70. She's about to graduate from nursing school, so it's kind of hard to guess. but I'd say probably around 60 to 70.

Good. We all make it a good income. Yep. So you have a great goal while you're renting, which is clean up the mess and aggressively pay off your consumer debt, which means we're not going to do any investing. We're not going to live the like crazy newlywed life and go get a bunch of stuff and go on all these crazy trips. No, we're living on $40,000 a year. Tell yourself that and then throw that $100 at this debt and get it paid off.

You know, I mean, you guys could clean this. up in one year, Ethan, which is so amazing. And then beyond that, building up an emergency funds and then saving up for that down payment, which again, you guys have a great income, so you're going to be able to do that. Don't get tempted because everyone goes, well, you're married now. You need a house. You need a house. Go buy a house. They don't pay your bills. They don't know your stress levels. And it's going to add anxiety and stress to a newlywed's life if you do it before you're ready. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I am Rachel Cruz hosting this hour with my good friend, best-selling author, George Camel.

And we co-hosts another podcast, Ramsey Network show, All right, Smart Money Happy Hour. So make sure to check it out. All right, give us a call at AAA-8-25-5-225, and we're here to answer your money questions and any questions about life. You know, sometimes money definitely is integrated into our relationships and our jobs and careers and all the things. So we are here for you. All right, let's go to the phones.

We're going to go to Chicago, starting us off, and Brooke is on the line. Hi, Brooke. Hi, thank you so much for taking my call. Absolutely. How can we help today? So my husband and I found ourselves in sort of a unique situation last year. He had just graduated from dental school, and we moved to a small town in South Carolina, where he worked as an associate dentist at a practice that essentially was committing insurance fraud,

drilling on things that didn't need to be done. So after about a month or two there, we reassessed our options and realized the best bet was to move back to Chicago where I'm from to live with my parents while we finished out our lease on our town home there. So the original goal when moving here was to try to pay off as much as our student loans as possible. I'm a physical therapist. He's a dentist.

We both combined have about 600,000 student loans. Wow. Over the past year. Wow. Oh my gosh. Okay. So over the past year, we were able to pay off, I think moving here, I think I had approximately 140,000 in student loans.

We were able to kind of wipe that out. So now it's been a year living here. We've been with my parents. He still has his $420,000 in student loans. And so I guess the next step, like I'm just calling in trying to get some wisdom on, you We've stayed. We're still in a good relationship with my parents, but should we continue to live with them, saving up for potentially a down payment on a home?

Should we be looking more into renting for the time being? How much are you guys making a year? So his, he's a percentage of production. So his is approximately, I would say probably $140,000. 140? Since he's an associate dentist. Yeah. Okay.

And what about you? And I make approximately 90. Okay. And do you think... Oh, sorry. Well, yeah, so you guys living with your parents, you basically, if you lived on nothing, then you should be able to pay off this in two years. Correct.

Okay. With his, you mean, for his due loans. Well, yeah, you guys are, yeah, I mean, at $250, if you guys each live, if you lived on $50,000 a year, which is plenty because you don't have rent, or you're not paying utilities and stuff, I'm assuming, you got $200,000. Do you still have debt on top of his 420? So next month we will have paid off my state loans. Okay, so yours is done.

So the 420s left. Yeah. So if you guys had two years where you put $200,000 a year, that's $400,000, and then, you know, you're working a side gig or whatever. You guys are making $20,000 extra in those two years. You guys could have this paid off. I would be busting it. I would make it my goal to get out of there as soon as possible.

I'll say it that way. Don't let this be a hammock where you go, well, we're comfortable. comfortable. Let's go on a vacation. Let's get a nice car. We have no expenses. This is great. No, no. You see where I'm going with this? Because that's the real situations we hear from when people go, I'm living with, this really happened. They were living with parents to pay off their $10,000 in debt. I asked them, how much debt do you have now? 40,000 in debt. They went into debt while living with family because they got comfortable. And Mike, I guess we're trying to move out, I guess, as soon as possible. So we're looking maybe in the next few months here to try to move out. And what is rent costs in your area? It's about $3,000 a month. Okay.

So you'll be, you know, $40,000. It will slow you down by, you know, $36,000 a year, essentially. It would. And he accumulates about $2,500 to $3,000 a month in interest on his loans as well. Oh, my God. That's your rent right there. So that's worth noting. Yeah.

Yeah. Yeah. I would be busting it to make $300,000 this year and throw every penny at the debt. and maybe you guys get on a game plan with your family and go, hey, here's our timeline, here's what we're doing, keep us accountable. Check in with us. And there's a part of me, Brooke, too, that I, you know, for the good of just you guys in general, I do think there's a gift in living with them right now while you're paying it off.

But I think having an end date that kind of makes you uncomfortable and forces you guys out. So, I mean, this sounds crazy. But what if you did November of this year, right? And you got pretty much a good calendar year. and you're throwing so much at the debt, but then you're saying, you know what, a year from now, we're going to be living in our own place, we're going to finish paying off this debt.

It may take us an extra couple of months because we're living on our own, but there's something about that growing up and being out on your own as a married couple that, I don't know, I think it's good. There's something about having an end date for me would be really helpful. So it's not this ongoing idea that you're living there.

And I would, and again, I think I would, and I would shorten the timeline in a sense, just to get you guys out, right? You're both adults. You both are smart people. You're a physical therapist. He's a dentist, right? Like you are capable adults, and you'll be able to pay this off.

And there's something about two capable adults not living at home. That's good for you guys. But for a season, I think it's okay right now. I just have an end date. Does that make sense? Yeah. So if we set an end date, let's say, of November, do you think it's important to, because what we've been doing for the past year is doing that,

like putting all our money towards my student loans. We knocked them out. That's great. But now we have, like, nothing to shift for it. than like no debt on my part. Is it smart to kind of be saving money on the side as well just so that way if by November we're looking to buy a home? I didn't know. Brooke, Brooke, I need you to put the idea of buying a home on hard pause right now. We have a huge mountain in front of us. You guys will be homeowners and you will retire multi-millionaires. But right now for the next probably two or three or

four years, it's creating a foundation. Of $220,000. The amount of interest you pay is more than most people's mortgage. Yeah. So let's focus on knocking out all debt. Yes, all focused on this. Then you get an emergency fund of six months. Then we begin saving up the down payment. And so you might crunch the numbers and go, okay, in Chicago, that's a $700,000 home. We might need to downgrade to a townhome that's 600,000 in the suburbs, whatever. You guys can figure out the plan, but do not let this home get in the way of this financial foundation that you're building. Yeah, how old are you guys, Brooke? 27. Okay. Yeah. So, I mean, if you guys are debt-free by 30, you do some saving and you guys are, you know, homeowners by 32, that's a great plan. So, and you have plenty of time. You guys have time. And you make an incredible income. Like, you're going to be able to make some big strides. And that's if all of your income stays the same for the next five years, which is not. It's going to go up over time. So it's going to fast forward your plan. I think you're going to get to all of these things faster, but you have to do it in the right order, which is, you the baby step. So you want a $1,000 emergency fund. Go ahead and get out of all your consumer debt,

build up that emergency fund, and then be saving up for that down payment. Have you guys, have you guys read the total money makeover? My husband has, he's having me reading it right now. Oh, well, there you go. I'm going to give you a copy, but you don't need. I'll give, let me give you George's. That's fun. Breaking Free of broke. There's more jokes in there. I think you'll enjoy it. Yeah, yeah, it's a great one. And read the student loans chapter. It'll light a fire over you. Yeah, and it just kind of solidifies, Brooke, like just the way our generation does money, it kind of just like pokes a hole in all these, you know, industries to show you that you don't have to be normal. You don't have to be normal.

So I want it to solidify where you guys are. I don't want you going backwards in your progress. Continue to move forward. You have a great income. You guys are smart, but get rid of this $420,000 loan in two years. Do it. Make a crazy goal. Do it. Up next, we have Samantha in Phoenix, Arizona. Hi, Samantha. Welcome to the show. Hi, thank you for taking the time to speak with me. Yes, absolutely. How can we help? So my husband and I are on baby Step 7, and we're trying to figure out what to do next. So we are out of debt. We've got 3,000 savings. We're contributing to our 401k and our Rothairway.

And so we're just, and we got a home. That's amazing. What's your house worth? When we bought it, we bought it for 150, and right now it's worth about 400. And it's paid off? Yeah, we pay it off. How old are you guys? 28 and 29. Oh, my gosh, Samantha.

Who raised you? This is crazy. I grew up listening to Dave Ramsey on the car ride home. Financial Peace, baby. And you guys were like, all right, let's just live this out. So you guys got married, you were debt free or close to it. You were able to get a house faster and pay it off fast. What do you guys make a year?

Between the two of us. us, we make about 200 before taxes. Okay, good for you guys. And you said you owed how much in savings? 30,000. 30,000. Okay, awesome. And you're asking what's next?

Yeah. I also have a secondary question that might play into this. I have a house I inherited as well on top of this. And so we're debating selling it and investing it in another house to kind of be like our, you know, rent our current house and invest in the nicer house to live in. versus sell it, sit on the money, put it into stocks or something. Like we're not really sure what to do with it at this point. Yeah.

When do you guys want to upgrade houses? Do you know? We're looking to do it sooner than later. We are putting that home on the market because it's not making us anything and we're unable to rent it comfortably due to the location and manage it well. Okay. So we want to, you know, have a rental in the same city that we're in so we can manage it. What do you think you would net from that?

Probably $400,000 as well. Wow, that's incredible. So you would take that $400,000 and get a different house in cash, and then you would keep your current one to rent it? Yes. Is that feasible? Yeah. You can get the house you want for that $400 in your area.

Our dream house would probably be a little more, so we'd have a mortgage about $200, and then we pay that off in about a year to two years, that's our goal. Okay. Yeah, well, I think that's, yeah, so you ask what's next. I think that would be the next step, right? So probably for the next two to three years when it comes from everything from selling the

houses, closing, finding the new one, all that, you know. So I'd see you guys have like a house goal here for the next three years of buying something and if you take a small mortgage, paying it off quickly, all of it. So that would be. You'll be back in baby step six for a bit and then back to seven and then you reassess your goals. And that's really when the world's your oyster and you. guys get to dream? Do we want to get another home? Do we want to get into real estate? Do we want to give more? Go on these trips. It just sort of scales up everything. It scales up your spending. It scales

up your giving and it scales up your investing. Yeah. So to George's point to, you know, doing all of those things is going to be really important, Samantha. You know, when you guys are in Baby Step 7 and you're going to be settled there for a while once you have this new home and it's paid off is to up your giving and find some things that you guys are excited about. And I think, you know, this is one area that Winston and I really kind of had on autopilot for a few years and probably because we were having babies and all of that or not. We are giving and doing mathematically what we were

supposed to, but it just kind of didn't get as exciting. And so we've switched up even how we give. And it is so fun. Like it has brought the joy back for me in the last year or two of like, oh my gosh. So get creative in your giving. Find things that you really are passionate about. Do some fun stuff with that money.

I mean, genuinely, it is some of the most the most fun you can have with money. And we say it all the time, but it really is true. And then be saving, continuing to invest and even maybe, you know, have some big savings goals for things that maybe you want. And then enjoy some of it. And so doing the giving, saving spending formula, all three things need to be happening. And yeah, and that's what's kind of crazy is like there's not, a lot of people say this when they finish the baby steps. They're like, they want like babysat eight. Okay. Yeah, like, what do I keep doing? You know, so. I'm like, you tell me. I don't get to decide your life for you? Yeah. Yeah, we've done some travel and we've done some things.

So we could have more saved. But I mean, we've been kind of enjoying life a little. You guys have kids? No, we don't. Okay. We don't want a bigger place before we do that. Okay, cool. Well, here's what I'll tell you. No, go now, Samantha. Have kids. Yeah, don't wait for the big house. What I want to tell you is that. Babies are small. It's okay for your dreams to change. You may go, you know what, I want to stay home. And you guys have the flexibility to do that without it being, you adding any financial stress to your life. And so I would sit down to a dream date with your husband this weekend and go, hey, let's both put a goal for each category on paper of what we want to do next year. Here's my giving goal. Here's my investing saving goal. Here's my spending thing I want to do.

Rachel's boat is to have babies earlier. And we're having kids next year. It's going to be awesome. You never regret. You never regret it. We do, one of us is going to be a stay at home with the kids. So we want to be comfortable with that, like when it'd come. Yeah. I think you guys. are great, right? I mean, you have no debt. You're choosing the house thing. I'll say that. If the, if the, getting into this new house. That's the caveat is does that put a damper on your plan for one of you to stay home? I don't want you to like, well, once that house is paid off, then maybe we'll start thinking about having kids. I would put the kids as the priority before upgrading the home. The child will survive in this home that you have now. That's true. Okay. And then if we were

to say sell like this house in the next month and then we we decide not to buy a home. Would you guys let that money sit in a high yield interest account or would you invest or how much of that would you save? I would go high yield because you're talking about like a one or two year goal, right? This money's not going to sit there for more than one or two years. And that's where I go, hey, the market, it's been great the last few years. Who knows what 2026 or 27 is going to bring if it's negative 20 percent and now you're on the cusp of trying to buy this home. And so the high-yield savings account just gives you some stability.

It'll grow at, you know, three and a half percent right now. But that's, that's kind of more guaranteed than the market, which is going to fluctuate more drastically. So if I had a one or two-year goal, I'm going to park it in high-ield savings. And if you want a great option, you can check out Fairwinds. You can go to Fairwinds.com. They have an awesome smart bundle for you. Up next, we have James in Ohio. Hi, James. Hi, guys. Thank you for giving my call. Absolutely. How can we help? So my wife and I just last year purchased our first home. And it's a little bit of a fixer-upper.

Well within what we can afford. But I did jump the gun a little bit. And looking back in hindsight, I kind of regret it just because we still have a little bit of debt. Just a little under $20,000 total. Okay. $12,000 of that is on my wife's car. Okay. $5,000 in a student loan of her.

and just under two grand a credit card debt. Okay. How much do you guys make a year? Last year, I grossed about 80, and she, her about 20. Okay, perfect. All right. Well, why don't you all just, you know, pay this off in five months? That's the goal, ultimately.

So, but essentially my question was, is I'm driving a car that I bought for $5,000 cash, and we still owe about $12 on hers. and I know it's well under 50% of my income, you know, wheels and motors. But what I wanted to do was sell the car and get another, you know, cheap car just to pay that debt off because I'm so tired of making that payment. And what she disagrees with, she thinks we should just keep it and pay it off. What's the car worth? Probably about one or two less than I owe on it. And how much do you have in savings?

So I Pause on the baby steps because my house is in desperate need of a roof So I have 10,000 in savings earmarked for that Now I think that my dad and I Because I'm going to do it myself Can probably do it for about six Right I don't know what's what we're going to uncover when we rip the shingles off

You know open Pandora's box Wow I don't I'm not looking to sell her car right now I know we're on her team I think you guys will pay it off If you can pay it off in five months, it's not worth selling because now you've got to turn around and use savings to buy a $5,000 car or $3,000 car, which could lead to more issues. Which are going to upgrade sooner anyways.

So, no, yeah, I think it's doable. It's not that desperate. Yeah, and I think you guys need to tighten this up, James. I mean, you guys have kind of, I understand that the whole house situation has kind of put you guys in a different position. But, I mean, get back on track. And you guys can get all this cleaned up really fast, really, really fast. Just be on the same team with it, but no, we would probably not sell your wife's car. If you ever hear a money question and you want some guidance like you would on the show,

then we have a spot for you. So, I mean, I feel like this show, George, it's sometimes hard to get on the line. It's always, all the lines are usually always booked up. So if you're like, man, I've really wanted to ask this question, well, we've got a free tool for you. Here's your chance. Yes. If you go on our website, you can ask your money. question and get an answer to your situation. 24-7. It's pretty crazy. So AI, love it, hate it. Well,

we're using it for our advantage. So we actually, our Ramsey team went in and like did all their magic and the Ramsey AI is here. It's built on the Ramsey Principles, custom built so it stays in the guardrails. It's not random financial advice. It really is through Ramsey Solutions and what we teach. So you can ask your question at Ramsey Solutions.com or if you're watching on YouTube or podcast, you can click the link in the description. So you guys check that out. I dare you all to go test it out right now and see how close it is to what we would say in the show. That'll be a fun experiment. It's great. Yeah, we're trying to help as many people as possible. If you can't get on the show or slide into our DMs with your question and we don't get back to you, whatever the thing is.

Like you have the ability to ask a question about your money and we want to help you do that. All right. Let's go to Kurt in Calgary in Canada. Hey, Kurt. Hello. Hello. Welcome to the show. We love to bring on people who have absolutely killed it when it comes to money just to hear their story. And honestly, to kind of set up the idea like this can happen. Like you can actually start with nothing. Yes. And build a positive net worth and won over a million dollars. So, Kurt, thank you again for coming on. And what is your net worth. Just north of 2 million Canadian. Wow. And how old are you? I just turned 45, not too long ago. Well, that's wild. Are you married? I am.

Fantastic. Okay, tell us the mix of this 2 million. Break it down for us. Oh, goodness. Probably a quarter of it is retirement. 10% is my kid's college fund. I've got about a quarter of it in corporate assets. for the businesses that my wife and I run and some cash on hand, some, you know, probably a third of it is my house, our house. Yeah. That's incredible.

I love it. And you guys have been following this plan for how long now? So you'll have to forgive me. I didn't know Ramsey and the Baby Steps existed until maybe four or five years ago. You were smart before you found us. That's impressive. smart and stupid. I won't lie. You know, we took on a, what I would call a soul-crushing amount of debt, but we worked our way most of the way through it, and all we have left is the mortgage. Wow. What's your household income?

Just right around $200,000. Okay. What was your best year and worst year of income during this journey? Oh, well, the worst year would have been when we first got married. I was still a university student, and my wife made $33,000. dollars. But once I graduated, our household income sort of started around 70 or 80,000, we kind of averaged around 100, 110 most of the time. It's only in the last few years has it really moved upward. That's awesome.

And did you guys inherit any of this $2 million? You know, my wife's mother gave her part of her, when my wife's grandmother passed away, my mother-in-law gave us $5,000 to go on a trip for money. So safe to say, it did not mathematically cause you to become millionaires? No. Because that's a big myth we hear all the time. Well, you've got to inherit money to be a millionaire. Must be nice.

Not at all. And what are your careers? So my wife is a bookkeeper, and I'm an engineer. Oh, yes. Which? That's about right up the alley of our study on millionaires. Number one career choice. in the millionaire study, over 10,000 of them, was engineer.

What do you attribute that to, Kurt? Is that, you know, you're a process-driven guy, and you just went, okay, I'll just follow the process. Well, I attribute it to my wife, as any sane man should. No, we, it was always, you know, we live within our means. And apart from a few decisions along the way, you don't. buy something if you can't pay for it. Okay, so y'all have always been very averse to debt, you would say. Well, yes and no, my mentor retired earlier than planned and he sold the business to myself and my, one of my, my business, current business partner. And we weren't

quite ready to purchase that outright. And so we had to finance the purchase of the company. Oh, that's right, that part. But consumer debt when it comes to clothes and vacation. Cars, cars. cards. Cars, we financed one and I, and it just, I hated it. Yeah. After about two years, two years, I just couldn't stomach it anymore. And so we got rid of that as soon as we could. Wow. What do you guys driving today as real life millioners? Give me a year, make model. My car is a 2013 Volvo C30, just a little hatchback with over 100,000 miles on it. My wife, she gets the new car. We bought her a new car just a couple years ago.

As it should be. A tree fell on our last one. Oh, my goodness. Yeah, it was just unfortunate timing. But, no, she has a 2023 Volkswagen Tigwon. Nice. Very great. And paid for in cash.

paid for no nothing that's amazing so she's got a three-year-old car you've got a 12-year-old car and that's we found a millionaire study the average millionaire drives a four-year-old car with 41,000 miles on it and the top brands were Toyota and Honda yeah which is pretty wild so you guys are square in the middle of that and you guys have four-year degrees both of you or more both of us yeah okay were you guys super smart what were your GPAs do you remember uh I'll just say I finished my degree with the GPA of around 3.7. My wife's was higher. She's a smart cookie.

This is impressive. I know. That is impressive. That's amazing. Well, Kurt, what would you say to someone that's listening? Maybe it's a newlywed couple. When is I'm still in school,

maybe they're starting off just like you and your wife did. You know, how would you say, what are the principles that you would tell people? This is what you have to do if you want to start building real wealth. Live on less than you are, less than you make. Make it do. Use it up. Do without. Those were the guiding principles that we live by.

Wait, say it again. Use it up. Use it up. So if you've got something, use it. Don't waste. Yeah, don't wait. Don't wait. Don't be wasteful. Do without, meaning that if it's not absolutely necessary, don't do it. And yeah, use it up, do without and make it do. So repair, repair as needed and make what? you have last take care of what you have so that you don't have to keep going and buying new things. Yes. That's old school. That's definitely like a grandma, grandpa principal right there. You know, coming out of like a great depression. Like, we're not going to get new stuff. That's crazy. This works just fine. We'll fix it up. Well, I love it because you can get in the habit. If something just kind of is off a little bit, like, yeah, we'll just get a new one. Yeah, we'll just get a new one.

On Amazon, it'll be here in two hours. Yeah, and you end up, you do, you end up spending so much doing that. Okay, so, Kurt, would you say now where you guys are, do you, are you enjoying your money? Do you feel like you guys are having fun? Not yet because we still have a mortgage. And so that, you know, the fun is coming when that's done and gone. Yeah. But, you know, right now we're still working the process. And but for me, it's the piece that comes from, you know,

it's like we've got six months of an emergency fund. So that if, you know, because we're both, we're both self-employed, if our income is variable, it's like, you know what? That's okay. we've got comfort and peace. Yes, absolutely. Yeah, that padding is very real between you and life. I mean, there is something that does give a lot of,

oh, you can sleep at night, the stress is down, because if something happens, we're going to be okay. We have this money set aside. So how much longer until the house is paid off? Five years. Okay, yeah. The goal is debt-free by 50. The ripe age of 50, and by then you'll probably be worth closer to $3 million.

Maybe closer to 3.5. If things keep trending the way they are, yeah, maybe, yeah, I could see that happening. Well, done, Kurt. Thanks for the inspiration. Yeah, you guys are awesome. Thanks for calling in. Always your stories. Yeah, definitely kind of give a boost to people out there to see real-life people doing real-life stuff.

So thanks. Our scripture of the day is from 1st Timothy 6, 5 through 7. This is one of my favorites, George. But godliness with contentment is great gain. for we have brought nothing into the world and we can take nothing out of it. Beautiful. Bob Marley said, Spend life with who makes you happy, not who you want to have to impress.

Oh. That's pretty good. But yeah, the godliness with contentment is great gain. That is, that's big. You brought nothing into the world. You can't, I saw someone. I couldn't quite live with this philosophy because it's a little bit too Yolo for me, but it was like on Instagram was a meme.

And it was this woman. She was like at the beach. She had a drink or something. And she was like, you know, no one, basically like, in the graveyard, you're not going to, you don't care if you're the tannist or the, have the best skin, skinniest, biggest bank account. Like, she listed all these things that we worry about. She's like, go enjoy your life. Like, eat the pizza, you know, take the trip, do the thing.

And I thought, you know, it's a little bit of that. And you are very experiences over things person. Yes. Which is wise. The data bears this out. That it's one of the best ways to spend money is on experiences with people you love. Love. Yes, we've heard that. Arthur Brooks talks about that a lot. And there is something to that. Rachel's using that to justify every next trip. She's like, Winston, it's science. We have to go. We have to go. This is where we should spend our money. I'm telling you, it's what everyone remembers. It's the fun big meal. It's the whole. You know, at my house, we had all the personalities and her spouses. We had the great memory. You had the best time. You guys were so generous. You have a great dinner. I don't know, all of it. There's something about, yeah. You could have bought a purse. But instead you said, you know what? Let's have a great meal with friends. And I can't take the purse with me into the next life, but I'll take the memories.

Could be in your Costco casket in there with you, but what good's that going to do? It's not going to do good for anyone. So I love it. Yep, godliness with contentment. Great gain. You didn't bring anything to the world. You can't take anything out. All right. Let's go to the phones. And we're going to go to Hunter in Fresno, California. Hi, Hunter. Hi. Hello, hello. Welcome to the show. How can we help today? So my wife and I, we are a little bit of, we just got married about a year ago. We started off really good financially. We're making a little over $100,000. Well, we kind of racked up some debt.

We bought a new truck. So now we're, I have about. about $50,000 on that. And then we also bought a... That's a nice truck. It is a nice truck. But we also got a camper. Oh, how much is that, Hunter?

We're about 20,000, what we still owe on it. Okay. What other debt? So other than that, the only other debt is we just bought a house about a month ago. And so now we added that $2,800 payment onto our monthly payments. And what's your monthly take-home pay? Monthly take-home pay, it kind of ranges. It ranges anywhere from, it can be anywhere from $5,000 to roughly about, I would say, about $9,000, $10,000.

Whoa. Okay. Well, that would be more than $100,000 if you're fairly consistently getting $8,000, a month take-home. Well, yeah. I mean, this past two months, we've really. only been taking in about $5,000. But a couple months prior, we were... How are you guys surviving, Hunter?

Yeah, your mortgage is over half your take-home pay in many months. And you've got a camper loan or pigment in the truck? So the truck payment is $1,300. Oh, my gosh. And what's the camper payment? A thousand. So you got $2,300 going to toys that are going down in value every day. Yep.

So, okay, but my thing is, if you make $5,000. $5,000 a month, that's $5,100 just in payments. How are you guys making your light bill and food? Like, do you guys have savings? We do. We have, we have roughly about, so we have roughly about $20,000 in our savings account. Okay. And you're just going to be draining that a little bit at a time to live off of. Right. Well, so that's right now, the reason that fluctuates is I'm currently in school. And so with my construction business, you know, there's sometimes, you know, I'll get a job and I can work around school and I do great. And then there's other times that, you know, school gets caught up and I don't have as much time to work.

Yeah, but you bought a camper. Yeah, it feels like a bad time to buy a $50,000 truck and a camper. And a camper that you probably don't have time to use. Hunter, do you just feel crazy? Like, do you feel like, what did we do? I, yeah. What does your wife think about all this? Make a, let's, yeah.

Is she like, hey, we got to get out of this situation? Or she like, it's fine. He's got it under control. Both, I guess. She, so, I mean, you could tell if she gets nervous or frustrated every now and then from it. But she's also, she realizes that we're not, I guess, we're not, we're not at the end of the road yet. So we can still come out of this. and so she's a little bit more comfortable with that.

Okay. So, yeah, we're definitely working on trying to get it off. Probably nine to ten months away of having nothing, though. You know what I mean? Like, I think, y'all don't, it doesn't feel this, I don't feel an urgency necessarily. And so that 20,000 is going to go really quick. Because the months you do make the $5,000,

you're already $100 underwater, right? So you take that $100. And then you got to, you know, you guys are probably going out to eat, you're stressed with school, so you're, you know, you're doing this. And I mean, you guys probably are not on a very strict budget, are you? Right now, we actually, past couple months, we have gone to a strict budget. We don't really eat out maybe once every couple months. Oh, Hunter.

Really? If I looked at your bank account statement. Overnight, over two months, over 60 days, you don't eat out except for once. Out of 60 days. Yes, ma'am. Yes, ma'am. All right, I'm going to take your word for it, Hunter. I feel like you're an honest man.

I will tell you what I would do if I was in your shoes as a Newly. I just feel like a Starbucks run is probably in there somewhere. Maybe for her at least. A quick chick-fil-A nugget, you know? You guys need some vices right now. This is crazy. Okay, let's make a plan. Make a plan for Hunter.

Luckily, chick-fil-A is like 30 minutes away from you. Okay, that works. Okay, fine. That's fine. So I'm Hunter. I'm a newlywed. I've been married a year. I have a cool, great income.

What are you going to do, George? I am selling the truck and camper tomorrow. Like I'm taking pictures tonight, I'm listing it tomorrow. And your construction ego just plummets in front of everyone. And any amount you're underwater on, you're going to use that $20,000 in savings to cover it and get yourself a beater car. Oh, okay. It's working now. And then what's freed up, George?

How much money you got... You just got a $2,300 a month raise, my man. So those $5,000 months turned in to $7,200. Now we can breathe. Oh, my gosh, George. What a plan. This is a solvable problem. Then what are we going to do?

Then we need an emergency fund because you likely will deplete that 20K to cover the underwater difference plus getting you a beater car. And so now our job is to really build some financial stability once we don't have debt to get three to six months of expenses. Has that sound, Hunter? Yeah, I make it sound a lot easier than what it is. I feel like you're not willing to sell this truck or the camper. Tell me why. The camper, I would get rid of it in a heartbeat. But I talked my wife about sewing it.

what was that? Yeah, I said, and they can be tough to sell. Well, they're tough to sell, and it actually came from her parents, and so she's a little bit more stuff to it than I am. Don't have, like, attachments to campers. We've got to get attachments to healthy financial foundations. That's what we're looking for here. Or Hunter, you guys, here's the deal.

You know, you called the show. I feel like we're giving a little tough love, but the truth is you can stay in this cycle. You guys can stay with campers and trucks and payments. You can live in a truck and a camper, which will be your future. No, but this is normal, Hunter. This is normal. And you guys could go on for years and years and years.

And then what's going to happen is you're going to have a baby. Something's going to happen. One of you's going to want to stay home. You guys are going to be in your early 30s. The roof's going to be leaking. And you have no money. And you look back and think, what have we been doing? We've been working our butts off for seven years.

And we can't even do what we want with our life. Why? Because in our early 20s, we just, you know, our mid-20s, we didn't make decisions. These are hard decisions. decisions. It's hard for the ego. The ego hates it, but I'm telling you that you guys can stay normal. But you called the show and the show is far from normal. We are all about getting out of debt, making deep, deep sacrifices hunter in order for you guys to get ahead. In the future, you guys can get a great truck and a camper. But when you can afford it,

you can't afford it. You can't, you don't have the money for this stuff. And then you rushed into a house and all of it. So say it out loud, own it and go, hey, babe, I'm sorry, I screwed up. Yep. All right. What a great show, you guys. Thanks to everyone in the booth. Thank you, George. And remember, there's ultimately one way to financial peace. And that's to walk daily with the Prince of Peace. Christ Jesus.