The Ramsey Show - App - When You Don’t Owe Anybody Anything, You Have FREEDOM

Episode Date: September 4, 2024

from the Ramsey network. It's the Ramsey show. I'm Jade Warshaw. Next to me is Dr. John Deloney, and we're going to be your host for the next little bit of time here. This is a live show. You can call in with calls about your life and your money we'll help you build wealth do work that you love and create actual amazing relationships it's what we do here every single day so if you want to get involved you can call the number 888-825-5225 and we'll get you in the lineup all right john you ready to go to these phone lines let's go let's hit it let's get go to Jessica. She's in Oklahoma City, Oklahoma. What's going on, Jessica? My husband and I are on

baby step two. We've paid off about $2,700 of our debt. That includes credit cards, balance transfer, and then we have my car. We listened to your show. He's probably going to hear me and be like, what the heck?

He is really handsome, isn't he, for an Oklahoman? He is. He's the best. We make a good income. I stay home, though, and we've racked up some debt and we're getting into some side hustles like Uber, Lyft, maybe some Instacart. And I'm wanting to do it every day to get it done as quickly as possible.

I love that. And he's wanting to do it every other day. And I just want to be as good as that intense, and I don't know what to do when we're having disagreements on the intensity. Why doesn't he want to go as intensely as you? Probably because we've been pretty comfortable. We, you know, we've been living exactly how, you know, we want that, not that we can afford. It's hard when you have a lot of people who are more affluent than you around you, you

feel like you have to keep up. And so we've just been comfortable and I think you guys have differing. I think you have different definitions on comfort versus discomfort because you're describing a situation where you guys are up to your eyeballs in debt as comfortable and he's still viewing it that way. And you've realized, Oh, wait a minute. That's actually really uncomfortable. I want to get out of debt so that we can be comfortable. And I feel like his definition hasn't changed yet. Is that fair?

Yeah. I also feel like because he does work every day and I work in the home, if I got a job, I mean, to put two kids in daycare, like a nine to five isn't going to pay for that. Like it's going to have to be outside work after when he's home and can watch the kids. So maybe I feel like I need to bring more to the table. And I don't think he feels like he's already bringing stuff to the table, but he's probably tired at the end of the day. I don't know. I mean, there's some validity to that. If you feel that

that's the dynamic, that could be the case. I think there is a part of this where it's not necessarily tit for tat. It might be something where you guys sit down and go, okay, here's what the plan is. Here's the amount that we've decided extra. This is the amount we need to bring in extra every single month in order to meet the goals that we say we have okay so let's say that's i mean you tell me what is it two thousand extra dollars what is it yeah i mean we've already found a thousand within our budget a month to throw at this debt right but what's the goal what have you guys sat down and say here's what we need to bring in we need to oh for on our for on our side hustles? Yes, ma'am. We don't have a goal. So maybe that needs to be a goal. Yeah. Okay. So that's step one. Thing one is

instead of like, hey, whatever we get, we take. Instead of playing it that way, play it in the way of let's sit down, run the numbers, and we decide this is the amount of money that we decide that we're going to bring in extra. So let's say it's $2,500 extra. And then you go, okay, let's look at each other's schedules and let's feasibly figure out who can do what, you know, maybe he does a side hustle and it brings in a thousand and you do one that brings in 1500. Who cares? You met the goal and you both decided on it. So I think the problem is, A, there's not a clear goal and B, you're thinking of it in more as tit for tat. If work five hours he should work five hours on the side hustle if i do instacart he should do instacart um and i think that if you do that you're setting yourself up for you know an unmet expectation

definitely how does that how does that hit because i think that's dead on it hits fine i think we've had conversations about it, and I think having conversations each and every day and meeting each other exactly where we're at is super important. Can I tell you something wild? Whenever we talk about quote-unquote mental health, we talk about relationships, everyone talks about communication and communication, and people think that communication means talk more.

Yeah. And I find that a lot of people have a whole bunch of conversations all the time that amount to about nothing. And what I love about what Jade said is this is the act and art and science of communication. Let's agree on a goal. 2,500 extra dollars.

You as a stay-at-home mom, can you figure out how to find $1,000? Because that's like you working, what, 200 hours at Instacart. I don't know what they pay you for Instacart, but that's like you taking another, that's another job. You're earning 12 grand a year tax-free, right? And okay, I need you to get 1,500 extra bucks. Now we have a goal that's not going to move. And that also allows everybody to drop their shoulders when you hit that goal. And that lets you catch your breath so you can go get the next one. And you're in control of it.

It's not happening to you. You have said, this is what I want to get. And it's you, it's both of you guys against this thing, right? You guys are the ones that decided it. You're in control of it. That feels great. And can I tell you, you're not less ones that decided it you're in control of it that feels great and can i tell you you're not less than jessica thank you don't carry that around you're including the thousand dollars a month you found in the budget

the child care that you're saving you're making about 35 000 a year after taxes definitely right because it's it's about six or $7 million a year per child in childcare, and you found another $1,000. And you're raising two amazing kids. You're doing good work. I don't want you to feel less than. Just because you participated in running up the credit card doesn't mean that you're less than

because you're not out actively earning an income. You are a part of a household that is paying this thing off. Definitely. And the fact that we can have that extra, I mean, we already found $1,000, and if we can find another $1,000, $1,500 a month, then it's crazy how comfortably you can live when you have that extra liquid cash and you're not having to pay it off. And how fast you can pay this debt off.

Totally. I mean, within less than a year, how fast you can pay this debt off. Totally. I mean, within less than a year, I think we can do it. Oh, good. Done. That's great. How much debt is it? You never said. So excluding my car, it's about 19 grand.

Don't exclude your car. Why are you excluding your car? Is it almost done? Because I just have the line item. Including my car, my car is $23,684. Okay, we got to include that now. Yes, we just paid off a $2,200 credit card. We have about $2,000 left on another credit card.

We have a personal loan of $8,700 and a balance transfer of $9,400. Okay, good. A good chunk. So yeah, you guys, the good news is you're normal. The bad news is you're normal, right? And so we see people in your situation every single day. They rally together. They get a game plan like we talked about. They decide on the game plan. They spit shake on it and they start moving forward. And that's going to be you guys. And I think you're exactly right. The date that you projected sounds just about right. Most people, for anybody listening, most people who work the baby steps in the Ramsey plan,

they're debt free in two years or less. All right. Baby step two is where you become debt free. And most people, if they continue working in three years or less, they've also saved up three to six months of their emergency fund. So that's the way this works. And then people keep on working right through those baby steps. And most people, John, by the time they get to baby step six and they're paying off their house, it's been about 10 or 11

years. And so this is a lifestyle. This is a journey. This is not something that's just a flash in the pan. So getting on the same page with your spouse is super important because this is a lifestyle. This is also the Ramsey Show. Hey, you guys, I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years,

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That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney. Hey, guys, listen, you've heard me talk about it before. I'm talking about it again. The Live Like No One Else cruise is quickly approaching. And by quickly, I'm talking about next year. We have an entire cruise for seven days. It's from March 22nd to the your slot is now. You don't want to miss this unforgettable vacation. I told you we're going to places like Turks and Caicos, St. Thomas, Puerto Rico, and the Bahamas. There's lots of excursions.

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i'll be there be there or be square let's go to Laura, who's in Orlando, Florida. What's going on, Laura? Hi, good afternoon. Thank you. We have a son with a chronic medical condition and we are in baby step aggressively and baby step number two. and I'm trying to figure out, should we, we, we have about seven or a little more, um, liquid cash. I'm trying to figure out, should we take the rest of that and pay off the remaining debt? Um, or cause things can turn left real quick with him. And we learned the hard way a couple years ago. We need money to buy the thing. So I'm trying to figure out, do I kind of reprioritize baby steps a little bit? Or how do I treat this given his medical situation?

Yeah, that's a really good question. Can I ask a little bit more about the medical situation? When it flares up, when things go down, is this you're hitting your deductible or is this we hit our deductible and there's a whole lot of things on the side that we have to do that insurance doesn't cover? It's catastrophic out-of-pocket max. Okay. What is your out of pocket max? 10 grand. Okay. And you've got seven grand. Uh, yeah. Sitting in a savings account.

Um, what I would do if I'm going to tell you what I would do if I were in your situation, because this is something that goes on and flares up and it's just part of life, um, for you, correct? Or is there an end in sight? No, it's a chronic breast of his life. Okay. If I were you, I would keep 10K aside. And that is always you have your out-of-pocket max all the time. That's going to give you more peace than you could ever think of.

And then that stays there. And if you have an HSA, I throw it into an HSA. And then you work the baby steps and that way if anything pops up you know you're covered it's not stopping you from going forward it's not stopping you from working the baby steps with intensity and if something happens and you dip into that then the next year you're back at it again you keep that 10k and it's always there because assumably there's always going to be the the the, the chance for you to hit that out of pocket max every year. That's what I would do. Okay.

Is that cool? Is that cool? Yeah. We're just, I mean, I just feel like we make a good income, but we also spend an astronomical amount of money on medical expenses. And I just, I'm trying to figure out how to, you know, like, stay afloat. I think that does it because you're paying these medical bills as you go, and you know they're going to equal up to $10,000. So, yeah, probably out of pocket every single month, that feels hectic, yeah? Yeah. And, Laura, there's not a resolution

here i mean there's not a time this will plane it's just every year it's just gonna be ten thousand dollars ten thousand dollars ten thousand dollars um well i mean like two years ago we we hit it really quickly within about two weeks. Because when something happens, we're typically talking about an ICU stay. So, but like this year, we haven't hit it yet. But it's also just expensive, the monthly medication, the medical equipment, you know, all of the things we have to buy every month. And I feel like we're living paycheck to paycheck,

even though we make really good money. And I'm just trying to figure out a way to not feel like we're so strapped all the time. Can I offer, this isn't going to help with the math problem, okay? Uh-huh. How old is how old is this is this baby 11 he's 11 okay are you tired is he what are you tired oh exhausted exhausted like i have a 14 year old andold and an 8-year-old, and when they're not well, everything in my life falls over, and I've got nothing compared to what you go through

on a minute-by-minute, hour-by-hour, year-by-year basis. And I want you to... Here's what I think the goal in your house has to be, is we have to work towards separating the math problem from how exhausted and frustrated and angry and heartbroken we are. Okay. Because $10,000 in an account on an annual basis, even if that's the first 10 grand of January and February, that's just what y'all do in your house. Yeah. Should allow you to exhale we've got this year covered and look at this we didn't even get there this year so we only needed 3 000 bucks because we only used 3 000 last year we had seven that rolled over boom and then we're gonna we're gonna max out at HSA because we know every month we have to buy stuff.

And so then we're going to spend our energy just being sad. And that's different than trying to survive. You get the difference? Yes. Being sad is... I know we've been in survival mode for... There you go. Three years now.

There you go. And so you're in survival, survival, survival, survival. I want you to, when you feel that fight or flight, we're in, what's going on? We got $10,000. We were fine. We have this year covered. Exhale. Okay. Now, husband, let's just go put our feet up on the back porch when our 11-year-old finally goes to sleep, however uncomfortable he may be. And can we just be sad? It's not supposed to be like this. 11-year-old finally goes to sleep, however uncomfortable he may be, and can we just be sad? It's not supposed to be like this. 11-year-olds are supposed to be running around in the yard and tripping over stuff and playing with dogs,

not laid up with tubes in ICU. Right. And you see how those are two different challenges? Yes, definitely. But it all feels mushed together. Okay. Let's make it a party. Jay, that's a soul tax. Let's make it a party jay that was that's incredible that's

a soul tax let's just get this 10 grand in an account and an hsa we're gonna leave it there and we'll at once we get a 10 grand jade i would probably just because i'm i'm a little bit of a worrier tell us i'd probably keep adding well i've got 500 bucks extra a year, a thousand bucks extra a year. Yeah. And maybe I look up one day, one time and it's 20,000. Then I'll make a decision then. But I know this is going to be a part of our life.

It's part of your life. And let's make peace with the math problem so that we can spend time heartbroken and dealing with the emotional reality. Exactly. And that's, that's essentially what we're trying to do here, Laura.

We, the last thing you need to be worried about is money. Do you know what I'm saying? That's the last thing that trying to do here, Laura. The last thing you need to be worried about is money. Do you know what I'm saying? That's the last thing that needs to be stressing you out. It sounds like you already have a high deductible plan. Do you have access to an HSA? Have you seen that anywhere? We did the math the first year once it was,

we realized how catastrophic it was in March. And it's actually cheaper for us to go on my husband's PPO plan than the high deductible plan, much cheaper. Okay, that's fine. We stick all that money in a high yield savings account. Okay, great. That's perfect. That's perfect. And again, like John said, you have $7,000 now.

If maybe by the end of the year, it's dwindled down to $5,000, that's okay. You keep it and you add five more to it as soon as you can at the beginning of next year. And that's the rhythm of how this plays out. And, you know, if, if, if something happens and you're like, you know, it would feel a little bit more better, you know, if we had 11, because there's this, you know, you're realizing hotel stays or you're realizing something else that is added to the burden of, you know, hanging out in the ICU, add it and make this work. Because if you can take this off of your normal month to month budget, it's going to make your day to day, week to week, month to month cash flow work out a lot better than it is now. And it's going to take that stress, at least that financial

stress out of the equation. And really, that's what I want for you. And I'll tell you, Laura, your little one won the lottery getting you and your husband as their parents. He's really blessed. This is The Ramsey Show. Hey, you guys, health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values

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slash budget. That's chministries.org slash budgets. That's chministries.org slash budgets. You're listening to The Ramsey Show on The Ramsey Network, where we help people build wealth, do work they love, and create amazing relationships. That's what you're here for, Dr. John. That's right. The relationship part. You know about money, too, but if you have calls about your life, your money, we'll take the call. The number is 888-825-5225, and we'll get into it. We'll get involved. Let's get involved with David. He's in Montgomery, Alabama.

What's going on, David? Hello. Thank you for taking my call. You bet. How can we help? So my main question is, since we're in the military, we move every three years. And most people will buy a house at their new assignment and sell it three years later. And then throughout their career, they buy, sell, buy, sell.

I'm wondering if that's the right idea going forward or if we should rent. And while we're renting, accumulate money and investments that we kind of make money off of over time and then have a large down payment for a house when it's time to get out of the military and settle down somewhere. It's almost like you've really thought through this. Yeah. Who's telling you that you're wrong? By the way, we have openings if you want to co-host the show with us. I'd love it. A lot of military people will buy a house and then they'll keep it. And then they move and buy another house and they kind of build a house of cards.

And it comes back to bite some of them because renters don't always pay. And things happen to houses and all that kind of stuff. So then you know the downside. Yeah, yeah. We definitely don't want to do that. By God's grace, the last two assignments, we bought a house. And by the time we sold it about three years later, we did make good money off it. But I just don't think that's going to, I don't know.

Nobody knows the future. We don't know if that'll keep going. Yeah. But I don't know if that's sustainable or if we should kind of shift down and do renting and put money away. Yeah. Here's the thing. Yes.

You know, real estate, it's a great, it's a great investment for the most part, if you're investing in the right real estate. The way that you're talking about, it's not sustainable for a couple of reasons. A, these, you're going to end up with houses, you know, cropped all across the United States. It's going to be hard to manage them, hard to keep up with them. You know, what we teach here is if you're doing real estate, you need to kind of be in the vicinity, especially a beginner, be in the vicinity of the real estate so you can watch it, see what's going on. And when we talk about building a real estate portfolio, it's after you already have your primary mortgage paid off and then you're buying these other houses in cash. That's the way that we teach it. So there, I mean, of course, you probably have a buddy where this has worked out great for him.

And if it has, you know, good for him. But I don't think it's sustainable. And I think there's a lot more risk that goes along with that. So if I were you, I like your plan. I like the idea to rent and save up in a high yield savings account if you're in baby step 3B

and save up a down payment. And who knows, at the end of all this, you might be able to buy a house outright. That would be my goal. Hey, David, with the money we've... Go ahead, brother. Go ahead. Yeah. With the money we've accumulated over time, because my wife is amazing at the budget. I'm more of the spender than she is. But we've put quite a bit of money away and seeing that grow, seeing the compound interest on that is really awesome. And to see that go for, if we rented for the next 10 years, we could have quite a bit of a chunk of change

to put down on a great house. And then soon enough, just really attack that mortgage, get it done before 15 years and then the world's up to us. And so we can help our children out, all that fun stuff. I love hearing all the stories that people say on the show of their freedom, the feeling of

freedom they have after they're done to travel, to do all these fun things. And that's what we're building towards. And you get a housing stipend? Do you get any housing stipend? We do. Perfect. Yes, we do. And so we try to match that up. Most places we've been, it matches pretty much, you know, that that's what we say is our budget line item for how much we can pay. You guys are smart. You got this. Okay, David. We're trying. Hey, David, help speak for all of the veteran community worldwide, okay? I know you can't do that. I'm just being ridiculous, but help me out here. So there was a year when I realized my wife and i were six figures in the hole it was a mess that i had played a massive part in creating we sold our family home and i was working at a

university and i moved my family into a residence hall me and my wife and a toddler and it was both a zoo and when i look back on it, incredible. It changed our life because we spent one year or a little over a year with no anything bills, no electric bill, no water bill, no rent, no nothing. Okay. So I asked that because I know that that one year was so transformational. It had such an outsized ROI in the course of my life. Why wouldn't somebody in your situation, when you can take the stipend or live on base, if you're playing a 10-year game like you and your wife are,

is there really that big of a downside to saying, okay, let's live on base for three years and we can pay for a house with cash in 10? Help me with that, because that's something I've just never understood. Yeah, we've looked into base housing at every base we go to, and unfortunately there's a lot of mold issues. There's a lot of water issues, so water quality is pretty poor. And the more news stories we saw, and also asked locals,

so it wasn't just, you know, what does social media say, but the more we asked friends who'd been on base, you know, they were like, oh, you know, in a three-year time span, they spent half their time moving from house to house because their house had to be gutted because of mold. And then they keep getting issues of water, like, so they'll get a warning that says you have to boil your water. And so do you even want to shower in that? Or, you know, there's a lot of hoops that people have to jump through and it's really sad

and really unfortunate. And, uh, they say they're trying to address it. The military in general says they're trying to address it. But even those last month here in Montgomery, you talk to people, uh, who've lived on base, they have all sorts of issues. You drive by the house and you see you, I can tell I'm, I'm not a house builder or anything you i can tell i'm i'm not a house builder or anything i can tell the roof needs to be done this needs to be done that needs

to be done okay so you're saying that if you take the stipend you can live off base it's at no cost to you you might not be able to pocket that money but at least it's not it's not you're not at a loss for officers i can say that for officers, for sure. That's a BAH, they call it BAH. So the housing allowance is comparable in most places, I'll say, to a better, definitely a better quality of life off base. Well, I appreciate you shedding some light on that. I've always wondered, and that's actually very helpful.

Yeah, I didn't know that. I didn't either. I totally didn't know that. It's kind of anecdotal because we've been to probably four different bases and each one my wife really wants to. She's fully embraced the military life. She wants to be on base and talk to people and, you know, have that culture. But every place I've cautioned her, I've said, listen, I've heard stories and like we visit some of the base housing and it's tiny. It's hot. the roof needs to

be redone this needs to be redone a lot of times their contracts they'll call in you'll call for an issue with your house the ac goes out roof whatever um they'll call the contractor and the contractor is loaded like there's just too many work orders so even if you do have issues it usually takes a while so in our experience yeah anecdotally in our experience we've done we've done very well with off-base housing but listen keep doing it you guys like you guys preach it's you know it really works when they say we'll give you this much for housing because it usually turns out to be about 25 percent sometimes when you're a younger officer it can be more that's perfect more than that and listen keep doing that keep doing what you're a younger officer, it can be more than that. Listen, keep doing that. Keep doing what you're doing. I love your plan. I love this idea of

we're going to live off base. We're going to use the money that they give us. That's our budget. That's the minimum. And then instead of buying a bunch of houses across America, you're renting. And how long until you retire? How long until you're no longer moving every three years? It could be eight years. And so, you know, you get three, four moves in there and all of a sudden you rent the whole way and then you can really settle into a house that you really want to be in for a little longer. Yeah. So in eight years time, in eight years time, I think the fun thing to do for you and your wife is to, again, get out in front of this and set a real goal and say, okay, what do we want

to have in this HYSA in the next eight to 10 years? And what does that look like? How much do we have to save a month? What does this do for our lifestyle? And I think that's really fun to be able to have that number there. You can work towards it and to know that, you know, in eight years, you'll be close to a cash home or pretty darn near close to one is really, really, really exciting. That's good. I love that. Yeah. This idea of being in the service and everywhere you go, you buy a house and you're gaining equity in all these houses. That just feels, I don't know, John, that stresses me the heck out. That's right. That's right. And hey, if you want to learn more about buying real estate the right way, go to ramsaysolutions.com slash real estate or ramsaysolutions.com slash agent, and they will walk with you and they'll give you the same wisdom and advice that Jade and I just did.

But it's a great place to go if you have questions about buying a home in this bonkers market. Good idea. That's a great, great, great idea, John. Thanks for that. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession.

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It's free at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. You're listening to The Ramsey Show. I'm Jade. Next to me is Dr. John Deloney. All right, today's question of the day is brought to you by YReFi. YReFi refinances defaulted private student loans and builds a custom loan based on your ability to pay. You'll have a payment that you can afford with a low fixed rate interest rate. You couldn't get that anywhere else. So this is going to help you stick to your budget and work the debt snowball. So if you need this, go to YREFI.com today slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. This may not be available in all states. All right. Today's question comes from Betsy in Ohio.

We have a 25-year-old college graduate still living at home. She's working full-time at a low-paying job earning $15 an hour. She's had emotional issues the last few years and she's on medication for having anxiety attacks. We also think she has snowflake syndrome. She's living rent-free in our home without a specific plan to move out on her own i don't like the idea of charging her rent but i also don't want to stunt her growth in living a financially independent life from us she's a little emotionally fragile so we don't know how to proceed my fear is that i will have a 30 year old still not living on her own. Kick her out. I'm just kidding.

I should have said that. Well, I mean, here's the deal. There's several things going on here. So if she's on medication, that tells me she sat with a medical professional at some shape, form, or in some shape, form, or fashion. There needs to be a family plan. And since you have already gone a professional route

and she assumably has a diagnosed anxiety disorder of some sort you'll need to work on a plan the three of you um you husband and child on a what's next strategy okay here's number two this one's where things are hard you say these things that she's got emotional issues she has is stunted she you're worried about um um she's her being there 30 being there 30 she's fragile and then you threw in there i don't like the idea of charging her rent and my guess is you haven't liked the idea of her being uncomfortable her whole life and this fragility think of it this way often with our kids we don't want nobody wants their kids to hurt jade you and i have kids we don't want our kids to hurt we don't want our kids to be uncomfortable and what happens is parents

over the course of a lifetime keep going into the gym and taking the weight off the bar because they see their kids struggling. And they say, whoa, whoa, whoa, no, no, no, no, no. I worked really hard so that you don't have to struggle like this. I'm going to take the weight off the bar. And then they become 25 and something happens. Life happens. Things get hard. They get 28, 29, 30, and they face failure.

They face their first layoffs they their spouse walks out on whatever they never had and suddenly they don't got the strength because no one's ever let them handle the weight of a squat rack and so this idea of fragility can only be fixed with strength right unless there's brittle bones and we're going to go right there's actual medical issues sure but let's think this this emotional fragility is going to come through slowly over time heading into that anxiety and teaching somebody you can get stronger and i believe in you and i think you can we're going to practice but we're going to head towards this not just hide away in your bedroom rent free for the rest of your life listen it's not going to change i'm not going to act like

i know anything about this subject matter beyond. You do. You got life. You got life under your belt. I was going to say just beyond life, but you're the expert. So, so answer me this.

Cause I'm, I'm going to talk. I'm going to say what I think that somebody listening on the radio is thinking right now. Let's do it. Like I look at this and I go, wait a minute. I feel like I run into people every day who have anxiety attacks and are probably on some sort of medication

and they're leading full lives. They've got a house and they've got a spouse and they've got kids and they got a job and they're- And most of the time it's because they've had to and this child has never had to. Okay, that's just what I was trying to get to because I feel like we're treating this, and in some cases I feel like we come across as

and it's like, oh, tiptoe. No, no, no. I'm like we're treating this and in some cases I feel like we come across as and it's like oh tiptoe. I'm like wait a second now. Almost all these situations are somebody's been tiptoeing for 25 years and then you have enough and then I tell Betsy you've got to spend some time in the bed that you

made. Okay. And that means y'all got to work out a plan because it would be cruel at this point. To just up and pull the rug out. You got 25 days and you're out of here that's not that's that's not nice you created this world right yeah but you do betsy have to choose reality and you're right you're gonna blink and she's gonna be 30 your child and still living there and that's gonna be more betsy's that's that's more on betsy than it is exactly right that's exactly right so I'm reading the context here that this is not somebody with some major neurological challenges somebody who's wrestled something their whole life um that there is definitely some relationship challenges between

mom and this child all that said is to quote our friend um Cloud, at some point, your child has to be trusted with some problems. If you're going to stay here, you're going to have to pay in rent. And that rent starts in 30 days. And you're going to pay $200. And then it's going to go up in four months to $600. And then it's going to go up to $5,000. We're going to make this to where you got some choices to make. I hate you. I don't love you. You know that I'm not doing well. No, I actually believe in you. I'm going to trust you. That's so, so, so true. And Betsy, you're going to have to deal

with the discomfort of having an uncomfortable child. And here's the deal. My son's 14. He comes home from these cross-country practices where he's running halfway to New York City and back, or it seems like.

And he's exhausted. And I'm watching how much it hurts and i see he tripped and fell the other day or some guys and his knees were all skin just let him do my job is to stand next to him and not try to solve it but to say man i see how hard you're working yeah and that that gives him this this idea my dad believes in me too but like play it the opposite way, John. I mean, what if you saw- Hey, whoa, it's too hot. It's too hot.

You shouldn't be doing that. Hey, if you're gonna fall down, if someone's gonna push you down while you're running, you're not doing this. I'm taking you out across the country. And what if I told him, when things get hard, I don't believe you've got what it takes.

That's basically what's happening. I'm not gonna do that to my 14 year old, right? Yeah. And then if he becomes 25 and he shows some signs of some neurological challenges or some major psychiatric challenge dude now i've got a context um but here's what we want to avoid we want that anti-fragility that nasem taleb talks about i want my kids to be stronger when times get tougher so that they thrive when times get tough and you only do that

by doing hard stuff every day over and over and over and over again. That's real. Always being uncomfortable so that when real discomfort hits, you're ready to rock and roll. John, I'm gonna just give you the mic for the rest of the time. That's hard, man.

This is like a pet peeve of mine. It's very good though. And it's heartbreaking. It's heartbreaking for this daughter. It's heartbreaking for Betsy because Betsy doesn't want the world. She's also created. Yeah.

And on and on and on. Man, on and on and on to the break of dawn. That's good. That's a good word, John. All right. Let me see here. Let me talk to Thomas right quick. I can get to him real quick here in Chicago, Illinois.

What's going on, Thomas? I'm against the clock. What's your question? Hey, how are you doing? Doing good. Thank you for taking my call. My question is I'm investing in my retirement plan. It's a 401k through my job and I'm on baby step six and I'm wondering

if I should attack the mortgage and stop investing fully. I can give you a little context with that, but that is the general question. Well, here's the thing. I would never advise that. I would always say you need to keep investing. There's a reason that the steps are in the order that they're in is because, yeah, we want you taking advantage of that compound interest over time. And we want you building that muscle of I invest 15 percent no matter what. The only time I would say, hey, you're going backwards is if you went into consumer debt again, and then you were back to baby step two. But in this case, it sounds like you've got your primary mortgage, yes,

and then you've got this rental property. Is that also true? Yes. Okay, so how much do you owe on the mortgage, your personal mortgage? The primary mortgage is $250. The rental property is $130. Okay. What's the rental property worth? The rental property is worth about $260.

Okay. Is there a reason? I'm just asking. Is there a reason that you wouldn't offload the rental property to pay off your personal mortgage and then save up to buy cash for the next one? I would say yes. It's more of a personal attachment, I guess. It was my first home that I bought and I lived in it for, uh, for about four years. If I were in your shoes, you're looking for a way to pay off your primary mortgage as quickly as possible. And if I, and you were even willing to stop investing for that.

So that tells me you really want to get this thing paid off. If I were you, I'd be looking at that, that rental property as the solution. I would not stop investment contributions to make this happen. If you keep both of them, I'm fine with it. Just be intentional about paying them off. This is The Ramsey Show. From the Ramsey Network, it's The Ramsey Show. I am Jade Borshaw. Next to me is Dr. John Deloney. We're taking your calls. We're helping you build wealth, do work that you love, and create amazing relationships. We're doing that by taking live calls every single segment, talking about your life and money. Hey, if you want to

call in and tell us about your life, tell us to strangers about what's going on in your life and your money. You can do just that, and we'll give you our best advice. The number is 888-825-5225. That's all you got to do to get involved. All right, John, let's go to AJ. He's in Tyler, Texas. What's going on, AJ? Howdy. Howdy.

So I have a question. My husband and I just recently got married and like three months ago. But next year year he has plans to go to optometry school um and i'm guesstimating i don't know exactly the price of it it's going to be i'm guessing around 200 000 that we would have to take out okay um and that's over the whole entire four years and that's including the boards the exams everything like that the equipment yes four years, and that's including the boards, the exams, everything like that. All in. Yes, ma'am. And so I'm wondering if there's a better alternative than traditional student loans.

We're kind of new to the whole don't be in debt thing. So we don't really know what we're doing. So, AJ, I'm going to speak broadly here and this medical school is the one it's probably the hardest thing for me to try to wrap my head around when it comes to um jade and i but the whole me jade all of our colleagues will tell you don't take ls2 and loans to go to college um and medical school is tough and here's why if um there's a simple cost if if i want to become a brain surgeon then i have to be taught by somebody who knows how to saw open a skull and do brain surgery and that doctor she or he could make a

jillion dollars out of the marketplace. And so to hire that person to come in and be a professor cost X amount. So med school is always going to be incredibly expensive. There's just a labor cost, not to mention all the other things that universities pile on, all the other administrative things and mumbo jumbo. So I've always wrestled with that. In your particular situation situation y'all have to make a decision do you are you able to say for the next four years we're going to buckle down so that we can have the next 50 years after that um we can be free and we can live the life that we want to live meaning y'all got to come up with

50 grand a year and so that would probably fall majority on you as his wife to work and to say we're going to cash flow this thing and we're going to live like freshmen and we're going to get through optometry school all the way through the boards we're going to have spent 200 grand and he probably will not be able to work i don't know what the residency program is on optometry school, but we're going to get all the way through. There's not one. There's not one. Okay.

So maybe he can work limited amount, but we're going to go all the way through. And this is our goal. Four years from today, we will owe $0. You will have an optometry degree. You're not going to run out and take out a seven figure loan to buy a practice.

And we're going to be able to live wherever we want to live and when insurance changes when ai interrupts when we're going to be okay because we never borrowed any money but that's a choice you'll have to make like right now otherwise you're going to find yourself like many many of my friends who went to med school had careers as medical doctors and still have their student loans and their kids are going to college and that's that's a number of my colleagues and i'm telling you 20 years from now it is a nightmare it's a nightmare yeah that's what we're trying to avoid and we know like i do plan on working the entire time to kind of cash flow where we can. I just don't know that I'll be able to make enough to fully cash flow it. So I make, right now, I make seven.

But let me interrupt you. It's a value and a principle thing. And if you start trying to nickel and dime it, and you start trying to say, well, we can't because there's always a variable. And maybe the variable is, okay, we're going to have to delay entrance to school for one calendar year. So that means we're going to set out two years and you and I are going to work B-A-N-A-N-A-S and save up this money because our values that we anchor into bedrock is no one will ever own our family. Not a bank,

not a lending institution, not a car dealership, nobody. And if you don't feel that strongly about it, I mean, literally, he can send a few emails, sign a few pieces of paper, and they're going to give you $100,000 a year. That is a drug. It's just too hard. You have to say, I will not get on that train. Otherwise, it's just too easy to do it. You know what I mean? Yes, sir.

I hate that for you because I need good automatists out there and I want good doctors out there and I want good attorneys out there and all the schools are so expensive. Yes. But essentially what we were talking about here is you determining the timeline and you being extremely intentional. And all you're doing, you're differentiating yourself by not just kind of like letting the wind blow you into this, right? Like it's like, oh, optometry school, that sounds good. Let the wind blow me in. And oh, how much is it? All right, let me let the wind blow me over here to these student loan debts.

And what you're saying is, no, I'm going to intentionally be very clear about the direction I go and the speed at which I do it. And that's really what we're talking about. You're just lasering in and you're going, hey, I'm doing the same thing. I'm just making sure. And here's how I'm doing it. And then so there's this level of control that you have over it, as opposed to letting the system control you. Well, this is the optometry system. Once you jump in, you're in it and you got to get the loans and you got to do this and then you got to go and get the practice and you're like no no i can make my own rules right like you can change the game here you don't have to let the game run you right and i think

that that's actually pretty ba if you ask me like that you could just jump in here and go you know what no no i make the rules it's my money and i get to decide how we're going to do this i think that's pretty freaking awesome hey do you know, AJ, I don't have this data. Do you know how much an optometrist makes a year? What's an average salary? It depends. So his brother actually did it as well, and he started working last year. He got a really good gig making $165,000,

but some of his other classmates only started at $125,000. So it's pretty broad. good gig making $165,000, but some of his other classmates only started at $125,000. Okay. So it's pretty broad. So just for context, if you were both school teachers there in Tyler, Texas, y'all would start at about $58,000 or $60,000. And you'd have a combined household income of $120,000. And the reason I tell you that is it's real easy to get starry-eyed about a job title and not live with the reality of what that job brings to your house. Across the country, starting salaries for attorneys have fallen all the way down to $65,000, $70,000 in certain places, right?

That's a school teacher who works at Chick-fil-A in the summertime. And so there's a resettling of the outsized schooling expenses. Now, if you told me he's going to start at $325,000 a year, that's just what they make, that's the starting salary, and then we're going to go from there. Man, let's have a whole different conversation. I'm still going to tell you $325,000 a year. That's just what they make. That's the starting salary. And then we're going to go from there. Man, let's have a whole different conversation. I'm still going to tell you don't borrow money, but that's a different conversation.

If you're telling me best case scenario, best case scenario, he makes 150. Well, man, what if he put two years into becoming the best car salesman in Tyler, Texas? I guarantee you that guy makes more than 150, right? So it's just a re reimagining of what's possible when you put the dollar amount down and this dream side by side and say,

okay, what's real here over the long haul? And then, good gosh, what's it going to cost to get into that? It's $0 to get into selling cars. It's $200,000 for the price to play. Optometry school. There's more than one way to skin a cat is what John is trying to say.

This is The Ramsey Show. I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard

is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of all that grief, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all

of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is Dr. John Deloney.

We are your hosts for today, taking calls about your life, your money. If you want to get into it, you can call us. The number is 888-825-5225 and we'll get all up in your business. Alright, let's go to Timothy. He's in Laguna Beach, California. Oh, that's the place where James' favorite show of all time is. Laguna Beach.

He's got a... That's James' favorite show. He's got a tattoo of it, the whole thing. It's kind of weird, but he loves Laguna Beach. Alright, so what's up, Timothy? Hi, Jade. Hi, Dr. John. My fiance and I are huge fans, so thank you so much for taking my call. You got it. What's up?

So, yeah, my fiance and I are getting married in a couple of months. You are? Yeah, thank you. And my parents just gifted us $20,000, and it's just a gift for future down payments for our house or just extra support for the wedding. I got a high five when I got engaged. You got $20,000. That's incredible. I got a buffet, Chinese buffet rehearsal dinner at the Chinese buffet. Good on you, Timothy. Thank you so much. And although I'm very grateful grateful for the gift i'm not sure if i feel

comfortable with it just because my parents don't have a really good uh retirement plan set up for themselves and so for me i feel very hesitant and um so for me i'm not quite sure what to do with it interesting so you're like hey you guys can't afford to give me this $20,000 essentially. Yeah, pretty much. And I just feel like it would be better if they held on to it. And, you know, of course, for me, I feel so grateful because they're very generous parents. They always have been their whole lives. And they've been saving up all this money for this moment.

But for me, I know that financially they're not really set up well. And so for me, I feel a little burdened by it. But for me, I know that financially they're not really set up well. And so for me, I feel a little burdened by it. And so I'm not quite sure I've been really wrestling with this. You're such a good son. Yeah, that's pretty cool, man. That's so like, that's wonderful. It's really the exact opposite of selfish. How certain are you, Timothy? Are you confident or are you guessing as to their financial situation? Well, I know my dad has been doing the same, you know, embroidery job. He's self-employed and he's, you know, he's always been, you know, on the lower side of the income.

So he's always had lower income. And my mom had to pick up a job um taking care of elderly people and so i know that their financial situation hasn't changed and they've rented the same house for over 20 years like they still live in the same house that i grew up in and i know that financially nothing much has changed and um that could mean they just save a lot yeah that's like and so yeah part of me is like man i know people like that and they they're like, yeah, I've got $7 million. That's right. Yeah. You know, I'm honestly hoping, I'm just waiting for their secret to say, you know, to come out and say, hey, we actually saved up millions of dollars.

I know that that's really not the case. And because I talk about their retirement plan and it just, you know, they just say, you know, we're going to have to work until we die. And that just seems like the reality of the situation. Here's a few thoughts I'm having, okay? Thought number one is take into cultural context, take into, like, I think, gosh, I'm going to probably get in trouble for saying this on the Ramsey show. I think as a Western culture, we have stripped our culture of all sorts of meaningful signposts, if you will.

Like just pause and celebrate things. We've turned everything into a transaction. And so here's my hesitancy. One time somebody gave me a gift that i didn't think they could afford it was a really fancy dinner to celebrate a really cool uh milestone that we did together and i tried to be slick and i secretly paid for it behind their back john and i hurt that person and the person i'll never forget and i've never done it since, but she looked at me. It was an advisor of mine.

She looked at me and said, this was my gift. You blocked the blessing. Dude, it was my own arrogance. Like, oh, I know your situation better than you do, so don't worry, I'll take care of it. And so I have a bias there. And so part of me says, if somebody has spent the last 40 years saving nickels and

dimes for this moment when you are going to leave and cleave let them be adults and make adult decisions the other side is i also know what it's like to be haunted by a gift that you know somebody really is paint so part of me says save 20 grand, put it in account and say, thank you so, so much. Are you going to cashflow this wedding? Do y'all have plans? Can y'all do that? Yeah. My fiance and I are 100% paying for it. We're keeping the budget low of about maybe 17,000. Yeah. So we're 100% paying for it. Here's something creative you could do. I'm just thinking, I'm spitballing. I'm thinking about what John said, both sides of it, sides of it because i agree there's one part where you're like man i don't want to block this person's blessing because it's a blessing for them to give it it's a blessing for you to receive it

then there's what john said which i also agree with sometimes you're like man i shouldn't let them do that or they shouldn't have done that and you you live with that what if i'm gonna hybrid this thing what if you accepted the gift and you're like, I'm going to stash this away in a high yield savings or I'm going to stash this away in an index fund and knowing what you know

about their finances on down the line, you're able to re-gift that back to them. 20 years. Hey mom, dad, we got you. Plus interest. And you're like, you know what?

You took care of me and you gave me this gift. Now I want to give you this gift back. That's some fence post. What did you call it? Fence post? What did you call it? Sign post.

Sign post. And here's the third option um i'm guessing your parents are the kind of folks that have been working really hard and they wanted you to have good education and they made sure you knew what hard work was and they set you off pretty good is that fair yeah it's 100 okay i'm imagining my 14 year old being 25 on the eve of getting married and taking me out for lunch that he paid for and saying, Dad, I want to tell you what you gave me. You gave me character. You gave me this. You gave me this.

And you gave me some opportunities. Because of the investment you made over the last 25 years of my life, I actually have saved up, me and my fiance, and we've got enough cash to pay for this wedding. It would really honor us. And I'm using your dad's business. Would you be willing to embroider a gift for all of our attendees to our wedding instead of this $20,000?

And what you're doing is you're not saying, Dad, we don't need your help or your love or your blessing. You're saying, because you've been such a blessed i'm gonna get all choked up shoot because you've blessed us for a quarter century i would love you to bless us in this way and that way you don't rob your dad of his autonomy and his his honor and his dignity but you say it would really be a blessing us to channel it in this way and he may look at you and say you're taking this 20 grand son and you're taking this 20 grand, son. And you're like, yes, sir.

Right. And I'll put a high yield savings account because we don't need it. But instead of just saying we don't need you, there's something on or about saying, here's the story. I want you to see the story that you wrote 25 years ago, dad. And here's what it looks like now. Thank you. And man, if you could not take this, instead of this cash,

if you can embroider, use your talents and skills to make something for this wedding, it'd be a gift. And you see how that might be a third option here. Yeah, exactly. And yeah, I think that's awesome. And I know, because they handed it to us just the other day by surprise. And I said, hey, can we talk about this first? And my parents were like, no, you're taking it right now. So, yeah, let the air, like, and then come back to, okay, this is a math problem.

This is a reality problem. This is an honor and dignity and respect problem. And your dad may look at you and say, you're taking this money. And if he does, honor your dad. And they're not, we can tell just by listening. They're not the type of people because some some gifts do come with strings and it sounds like just by what you're saying they're not the type of people that is like hey you took this gift and now we get to decide you know or now we get a say in xyz or

we expect now that you will do xyz like they they don't sound like those sorts of people correct that is correct okay because if that was the case then i'd definitely be like drop the money and run like just drop it on their doorstep and go but they're they're not it's not that and so that's for me that's always the biggest red flag is if i take this money is there going to be something attached to it but if that's not the case they're doing it out of the goodness of their heart i love john's ideas i'm not going to add anything to that i'll say one more thing, Timothy. Do not, if you look back and suddenly realize,

oh, they've lived in the same rental house for 20 years because they were putting money away from my wedding. Don't let your guilt over this gift impact that blessing that they're trying to give to you. I often feel guilty about, well, I know what this probably, there's something to be said for living open-handed and grateful. Just dropping your shoulders and saying thank you.

And people have different priorities. That's right. We know we rented so that we could because we wanted to. Okay. They made grown-up choices for a quarter century for this moment. But sometimes it's just having a father-to-father or parent-to-child conversation over a cup of coffee saying i love you and i see you um is this the right move this is the ramsey show you're listening to the ramsey show i'm jade warshaw next to me is dr john deloney we just

spent the whole break talking about john mayer i hope you're a fan if you're not you need to become one but this is a show about money we talk about your life and what ke hope you're a fan. If you're not, you need to become one. But this is a show about money. We talk about your life and what Kelly, you're not a fan. Oh my goodness. Our phone screener is shaking her head in dismay. Oh my goodness. That's all right, Kelly. I forgive you. Anyway, I need some time. I might need some time. I need some time. This is a show about money, not about music, but John and I like music. We discuss it a lot. But if you want to talk about your money, give us a call. The number is 888-825-5225. We'll get you in. Speaking of money, you know, John, I find a lot that there's, you know, when it comes

to money, there's a lot of jargon, a lot of lingo, you know, a lot of words that it's like, if you don't know exactly what that is, a lot of terminology, if you don't know exactly what it is, it can leave you making assumptions it can leave you feeling left out of a conversation or maybe like feeling dumb okay yes that's the way yeah sometimes i'm sitting by dave by you by george i'm like what are y'all talking about nerding out i never feel dumb next to george but you and dave i just feel like what do y'all i know the words you're using i mean it it it's like that sometimes and so we decided that you know a lot of times folks will come up to me john and they'll be like hey

can you tell me such such i i'm asking for a friend they they want the advice but it's like i'm asking for a friend because i really don't want you to know that i was today years old when i actually found out what bankruptcy is for instance which happens to be the topic of the day bankruptcy we hear it all the time people call be the topic of the day. Bankruptcy. We hear it all the time. People call into the show. They're like, hey, I want to file for bankruptcy. They may not even really understand exactly what it is. So we're going to clear that up for you today, asking for a friend. What is bankruptcy, Jade? And how does it work? I'm going to explain how. And I need the help of my friend Michael Scott to do it. Hey, cuz.

Heard you're having money problems. No, you didn't. Listen, I got the answer. You declare bankruptcy, all your problems go away. That is a good point. Bankruptcy, Michael, is nature's do-over. It's a fresh start. It's a clean slate.

Like the Witness Protection Program. Exactly. Not at all. I declare bankruptcy! Dude, I remember where I was when that episode came out, and I remember laughing so hard I thought I was gonna die I have referred to that so many times in my life I don't know why they thought they could play that and then help have me do this segment I declare okay somebody called somebody told me they're like hey I think I'm about retiring I'm like can you afford to retire and they looked at me like during headlights and

I was like you can't just declare bankruptcy like Michael Scott. That's the greatest it's ever. It's awesome. That's one of the best clips ever. All right. So Jade, what is bankruptcy? What is it? There's all these different kinds and numbers and colors. What kind is it? It's basically a legal process that you can go through if you're buried under so much debt that you're like, I don't know if I can pay it. I don't know what to do. And so what, basically what you're doing is you're submitting it to the court and they're looking at everything. They're looking at your assets, your liabilities, talking about basically what you owe versus what you own.

And then they're gonna decide, can they actually pay this back or not, right? And then the court decides if you can't pay back your debt, they're gonna look at that and they're gonna say, if you have means to pay, how do you pay it back? And if you don't have means to pay, what they will look at canceling, okay? They might cancel some of the debt. They might cancel all of the debt. They might have you pay back some of it. So it's basically letting the court look at

your money and do what we do on this show, which is say, here's what you should do. Let's look at it. Can you afford it? How long would it take you to pay it back? All of that. So here's the thing. If you file for bankruptcy, in some cases, you might have to sell some of the things that you have in order to pay back the money, right? You might have to sell houses or cars, that sort of thing. And so that's how that works. So here's the thing. Bankruptcy, it can stop a foreclosure, right? If your house is in foreclosure or in the process of being repossessed it can stop that process um it can stop your wages from being garnished like if you're in so much debt that the government is popping in they're in garnishing wages or whatever bankruptcy can stop that from happening um it can help you clear out some debt right like if you've

got a bunch of medical bills or a bunch of credit card debt, it can help clear that. Sorry, student loans are not on the list for those of you inquiring. It does not cover other government debts. It doesn't cover things like child support or alimony. You are on the hook for that, okay? So you may have heard like what John was talking about. There's different types of bankruptcy, right?

You hear them spoken about as chapters. Right. The one that you hear most is chapter seven or chapter 13. That's the ones that you're going to hear that we talk about on the show a lot because, you need to replay some or all of your debts. Some of them we're going to cancel and some of them you're going to pay off and we're going to put you on a repayment plan. And that payment plan is usually between three to five years. And again, it sounds suspiciously close like what we do here. It's very close to that. So all the time when people call in, they're like, man, I'm thinking about filing bankruptcy. I'm like, they're going to tell you to sell your stuff and they're going to tell you to pay off your debt and get on a plan to do it.

That's what we do here. And the great thing about not doing it through bankruptcy is you still have control over it. All right. It's not the court reaching in and saying, yeah, you're going to sell that vehicle and you're going to let go of that. You know, you get to control it. All right. I digress. Chapter seven. This is when the court reaches in and they say hey we're going to sell all your assets and we're going to just erase your remaining debts and some of you might be thinking jade this is great i want them to erase my debts that's what i want but the thing you're forgetting is it takes up to 10 years for bankruptcy to be cleared off of your credit report 10 years all right again, that's them reaching their

hand into your life and they're taking the things that they can take. They're selling off your stuff and you have to just stand there and watch them do it. And so that's kind of what this looks like. When you file bankruptcy, you have to go through credit counseling afterwards. It's kind of like, hey, now we're going to try to teach you how to manage your money better because you went through this. And obviously it's going to cost you money. The entire process is probably going to cost you around $3,000 or more because there's filing fees and attorney's fees attached to it. And of course, the downside is banks know about this. Clients and businesses know about this and they get to choose whether or not they want to work

with you or not because of this bankruptcy. So it is not a cure-all. It is not a catch-all. Yes, there are other types of bankruptcy. Chapter 11, that has to do with businesses. So if you ever hear a business file, Toys R Us files for bankruptcy, right? It's just a way that they can reallocate their debt and probably stay in business. Chapter 12, that's another type of bankruptcy. You don't hear about it a lot unless you're into farming or a fisherman, that kind of thing. Chapter 15, again, for international cases. And then chapter nine, that usually applies to municipalities and things like that, state and local government, schools, that sort of thing. So the key ones that we talk about in personal finance, again, chapter seven, chapter 13.

And again, while we don't recommend filing for bankruptcy, when you do this, you have to file, you go through, file the paperwork. They're going to ask for certain things. They want your tax returns. They want your proof of income, proof of debt. And that's what they're going to use to ultimately determine what is going to happen if you're going to be in chapter seven, chapter 13, what you have to pay back, what they're going to sell off and what gets cleared. So that's how this works. The thing to walk around and walk away from this is bankruptcy. It's all encompassing. It's life changing. Dave Ramsey, he's got the most popular bankruptcy story I know of. I've never filed because most of our debt was student loans, but it's not something that we recommend

here. And it's for the reason that I've said before, at the end of the day, they're kind of doing what we teach here. They're looking at everything, listing the debts out, just like we would tell you to do, hey, list out the debts. And then they walk through and say, okay, we can sell that off, sell that off, sell that off. If you call in here, we're going to tell you, sell the car. Okay. Get rid of the forerunner. Okay. Can you sell some of the, you know, some of those old clothes? We're going to tell you what you can sell. And then they're going to say, okay, with whatever's next, you got to get after it. And they say, hey, whatever's next, you got to pay it off in three to five years. The only thing with us is for most

people who work the Ramsey plan, they're out of debt in two years or less. And so I'm just saying, and you don't have to have the scars that come with, you know, the government's hand reaching in and selling off your, you know, four by four or whatever. I think that's maybe the most important call out here is there are a few things more stressful and more destructive to an individual in the marriage unit man then putting your face in your hands and saying we're bankrupt yeah like you take the control you take you're done the control out of your hands the government has to come take apart our lives and sell it because we're out. It's not something to be taken lightly. Dave still has PTSD and it was 30 years ago, right?

Okay, I bet he does. Still a part of his life. You still hear it on him, right? This is The Ramsey Show. There's a time in your life and in the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on,

Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a baby steps millionaire. So get started on the American dream of home ownership today at churchhillmortgage.com. That's churchhillmortgage.com.

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Next to me is Dr. John Deloney. We're taking your calls. The number's 888-825-5225 if you want to get in on the action. The calls need to be about your life, your money, your wellness, all sorts of things we'll talk about. Hey, I know you guys hear us day in and day out. We're giving financial advice. We're talking about baby steps. We're talking about the ultimate way to financial peace. But it's worth noting that there's a foundation to all of that. And the foundation to all of what we teach is budgeting. And the best way to make the most of your money is by creating and sticking

to a budget that goes without saying you can't do this without having a budget. And since we know that, we created the best budgeting app that there is. And it's called EveryDollar. It makes it super simple to spend, to track your transactions, to plan and save for what matters to you. It's all in this easy to use app. And if I say that it's easy to use, that means it's easy because your girl is not really technology and technological savvy. Okay. I don't like it, but with every dollar I do like it. It makes it easy. It's very intuitive. It fits into your busy lifestyle and it fits into your pocket. Okay. You can do it on desktop or, you know, on your phone. And so it just, like I said, it helps you keep a pulse on your spending. It helps you make progress on those money goals. And so if you don't have every dollar, you need to download it today for free.

You can go to the app store or Google play. You can click the link in the description or you can click the link in the description if you're listening on YouTube or the podcast in order to get that. So get it today. Every dollar. All right, John, I can talk about every dollar all day. I know you're the every dollar queen. Budgeting queen. That's what they call me. All right. Let's take some calls.

We got Corey. He's in Palm Springs. That's who they used to call James. The budgeting queen? Yeah. He likes that. Yeah. He had to get rid of the tattoo.

He had to get it removed once you came along. Yeah. He was jealous of me that I had a budgeting queen. He was. All right. Let's go to Corey in Palm Springs, California. Sorry, James. What's going on, Corey?

Yeah, I'm new to the baby steps. I'm still on one. I have about only 300 saved up so far. But I was trying to see how to get going quicker, what direction I should be going. I'm going to be starting a part-time job. I have a full-time job right now. I'm going to be starting a part-time job. I have a full-time job right now. I'm going to be starting a second part-time on Friday. Um, I also have like a little hot dog cart business that I started on my own. It's very small right now. And just, I'm trying to get your

opinion on, do you think I should aim more towards like an actual legit part-time job and hustle there or more towards my own thing, just given like the upfront costs of it. I mean, I'd follow the money on this one since you're in Baby Step 1. I'm going wherever the money is. How long did it take you to get the $300 saved? That was this month. Okay, good. So with all three combined, once you start the part-time job you got the hot dog cart the full-time job what will you be making in a month

once all those things are firing um well with with maybe 3400 that's not including the cart the thing with a cart is a very hit and miss um you know like i i don't really know like i it's not a big thing it's just being by myself with a little push cart how much time do you put into it every week how many hours um if i were to go on the weekend on one day i might get maybe 150 or how many hours maybe like four yeah it's not really high return. The only thing too is like with the part-time, if I were to go more into it, it'd be seven days a week. I'm having a hard time. I do have, I'm in recovery. I have two years clean and sober. I do have a couple felonies on my record, so it makes it harder for me to get better jobs. Okay.

Well, listen, I admire the hustle. The hustle is real. I love that you're out here. You're like, I don't care if I have to sell hot dogs. I'm going to make it happen. I kind of like that you have some variety here because I'll tell you one thing with side hustling like this, you get sick of doing certain jobs. And so it's nice that you kind of can lean into one or lean into the other. And then you've got this full-time job here. Again, if something pops up where you can make more money than the hot dog cart,

then I would jump over to that. How much debt are you working to pay off once you get this thousand saved? I have about a hundred thousand. That's including my mortgage. Okay. That's including the mortgage. How much of it is the mortgage? Fifty five. Okay. That makes me feel a lot better. All right. So we got forty five thousand dollars that we're trying to pay off. You're making around three thousand four hundred bucks a month. Yeah. The key here is for most people, baby step one, they're able to do it in about 30 days. And the reason they get it so fast is because not only are they side hustling, Corey, but they're also selling whatever they can. They're living on bare bones.

I mean, if there was ever a month to sacrifice to the fullest, the month that you're in Baby Step 1 is that month. So you're going to, I mean, this is the month where you're like, hey, we're just eating peanut butter sandwiches. Like this is the month where you're like hey we're just eating peanut butter sandwiches like this is the month where you go hard in the paint um and then after that then you get into your normal baby steps uh baby step two gazelle mode so yeah that's what i would do john cory tell me a little bit more about this this hot dog cart how much have you sunk into this thing um the thing with that also is like i don't have all the and stuff. It is literally just a push cart with the grill. I only spend a couple hundred dollars on the setup, and so I do some hired catering gigs here and there.

But you're also rolling the dice again that you're going to get another, you're going to get caught again. Yeah, exactly. All right, let's do this. Let's not dig any more holes, both legally or financially. Is that cool? Especially for a hot dog, man.

Yeah, it's for a hot dog. Yeah, yeah, yeah. So just napkin math. If you mowed four lawns, that's $160. Okay. That's $40 a lawn. Give or take $10 here or add $10

wherever you happen to be and the reason I tell you that is if you can grab get a mower or borrow a mower from somebody and mow four lawns mow four lawns you've already reached your threshold that you're making with that hot dog stand and you know you have a repeat customer

and then you keep going back and going back and then nobody's going to come over there and write you a ticket for not having the right permits and i tell you that because that's just one of power washing odd jobs um i have a buddy of mine that started a six-figure business by changing oil in people's in their driveway his his name was gus menez. He's one of my closest friends. He's amazing. He drove around and changed people's oil in their driveway. And you're in Palm Springs. Like there's some folks with money who don't want to do this. You see what I'm saying? But you don't need, you don't need job applications. You don't need to

disclose everything. That was a former life. You're a person of integrity and you're a hard working guy. I just want you to keep your eyes open and not get fixated on hot dogs hot dogs hot dogs because man there's way more money to be made out there um and very unique in different ways okay is that fair yeah all right think think big but man go make it happen i'm, dude. John, I don't think he was fixated on hot dogs, hot dogs, hot dogs. That's James. Hot dogs, hot dogs, hot dogs. Oh, boy, oh, boy. You know, it's funny what people get into. Like, we should have kept him on the line and asked him, like, what made you get a hot dog cart?

You know, like, of all the things, like, what people are passionate about, it's interesting. But you're right. Here's how we end out this segment in a way that makes more sense. Then hot dog, hot dog, hot dog? Hot dog, hot dog. What we're talking about here is side hustling. And there is some method to the madness here, right? It's easy to go, okay, like what's available to me?

And everybody jumps to Instacart. Everybody jumps to Uber and the things that are kind of like preset there. But a lot of times times depending on where you live depending on what the market is you might not make enough for the time that you're really sinking into it and there's something to be said for and i i will say this because when sam and i were getting out of debt uh i'm not going to sit here and act like it was really the side hustles that broke us loose because we had to get our core income up let's be honest about that but the side

hustles did help and i found that when you do side hustles um that are more entrepreneurial based like what you were talking about you buy a pressure washer you go out you get the clients you set the rate you set the time you can make a lot more money doing those service-based yeah so fast so fast you mow lawns you decide hey i'm a nanny i set the hours i just you know this is what i offer cook meals. I do laundry or I start a cleaning service. Those are the side hustles where you're making. That's right. And those are the customers that tell their friends that tell their friends because everybody needs those kind of services. And you can be off to the races quick. So don't just necessarily go to the ones that are preset apps in your phone. Get creative, get out there, whatever you're good at. If you're good at making cupcakes, now you're a caterer, right? If you're good at watching kids, now you're a nanny. That's how

this works. Oh, and by the way, if you want to keep watching the show, head over to the Ramsey Network app. That's where you're going to go to finish today's show with me and John. We got Simone in Tucson, Arizona coming up. This is The Ramsey Show. From The Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. We are live from inside The Ramsey Network app.

I'm Jade Warshaw. Next to me is Dr. John Deloney. It's hot in here. Let us out. I'm Jade Warshaw. Next to me is Dr. John Deloney. It's hot in here. Let us out. I'm just kidding. But the cool thing is you can still call in. The show is still live. So you can call in with questions

about your life and your money. The number has not changed. It's still 888-825-5225. The only difference is it's exclusive. It's only in here. So if you're in here, thanks for being in here with us inside of the television.

When I was a kid, I used to think that the people were inside of the television. James lives inside the radio, but the rest of us get to go home. You're really feeling saucy today, aren't you? Well, you sure played a lot of Smashing Pumpkins in my head. It's the socks, isn't it? Show them the socks.

I'm not showing the socks. They're bright red. We can put it on camera. And a lot. Imashing Pumpkins in my head. It's the socks, isn't it? Show them the socks. I'm not showing the socks. They're bright red. We can put it on camera. And a lot. I'm not proud of these socks. This is what you get inside of the Ramsey Network app. Exclusive content like the color of John's socks. James making fun of my clothing choices.

Well, you know. Listen, I'm here for it. There it is. America. All right. Let's take a call, John. We are cutting up. Let's go to Simone in Tucson Arizona what's going on Simone hi guys thank you for taking my call you bet thanks for being inside the the app with us um okay so I think maybe the best way to set up my question

is like the end goal and then maybe where we're at right now so I think eventually my boyfriend and I we want to get married soon and have kids and the goal for that is to have land live maybe a little bit outside of the city and then I would like to eventually work part-time or not at all and I'm just not sure how to get there. Okay, I love this. I love that you're starting with the dream and then you're kind of reverse engineering it to get there. All right, so let's talk about how to get there. So what's standing in your way right now from that dream? So I don't know if there's too much standing in the way,

maybe just the smartest way to go about it. Right now we have a mortgage um we have some savings and i just don't want to get ahead of myself and go start looking at land to get my heart set on it maybe if it's not the right market or time to do that if we do decide to do to buy land and start the home building process, does it make sense to sell our house? Because I'm not convinced I want to sell our house. Whose house is it? Whose house is it? Who owns it?

But you're not married, so who owns it? Both of you are on the deed? Yes. Yipes. All right, so we only tell you this because we love you. Neither of us would have jobs if every dating relationship worked out and i get it and i know you're gonna be like no no but you don't understand he is the but i'm just telling you i don't have a job i'm unemployed if everyone in a romantic relationship told the truth to their partner or things always just work out like my mom well and here's the deal

you've entered into a legal binding contract and so basically y'all are in the eyes of the government y'all are roommates who bought a big expensive thing together the most expensive asset that most of us have and if somehow or some way this thing goes sideways um the legal unwinding of this will be a zoo and and so we tell people like there's the moral thing obviously that your mom's gonna tell you right but there's the when you get married there's a legal unwinding if one of you decides to end that marriage and depending on what state you're in and all a bunch of different factors if you just date in somebody and y'all decide to buy a house together and enter into this big of an asset purchase

together you're on your own at that point you're fighting fighting for your life just by on your own right and so i would tell you please please please don't just buy dirt unless until you get this thing in the right order yeah i was gonna say i think john is exactly right i wrote down on my list when i said well what is it that you want you said land a part-time job and then i wrote married question mark because i feel like that needs to be part of this plan in order for you guys to play this out in a way that's going to protect both of you in the long run and it's just a sick you know it's a it's a symbol for you guys that okay like we're locked in we're not going anywhere this forever um and i think that's important to lock that in if you're going

to do something like land so is he your guy ownership right yeah it's complicated with that part but it's it's in the works hold on tell me about this i i love this as the as the great avril lavigne one once asked why'd you go make things complicated? Yeah, spill the tea. Tell me about it. I think that our relationship got a little bit put on the back burner. His sister was murdered a year and a half ago. Okay.

And there was family stuff just surrounding that so okay i think it has less to do with him and our relationship and it has more to do with that dynamic so just him having to deal with family trauma and and leading through that exactly has that caused him to check out of your relationship is that what you're saying? No, not at all. He's amazing actually. Yeah. He's amazing. I really look up to him. Okay. I think that's worthy of having a conversation about what does the future look like and what does our commitment and covenant to each other look like over a long period of time? And I'm just going to, marriage is a much bigger deal than the way I'm about to lay this out. But if James Childs and I were going to go buy something together, the producer of the show, I would enter into a business arrangement with him before we went and co-bought something.

And neither of us would ever do that. But if we were to do that, I would make sure we have the details of our business partnership written out before we went and bought a big asset together. Similarly, I want you to think of this. Marriage is much, much deeper of a emotional, psychological, spiritual commitment than a business partnership, right? But at the very limited, at the very tip top, it protects both of you over the long haul. And so that's where I would start. And then there's the rest of it just becomes a math problem and a vision for your future together. Yeah. So let's talk about the math. So we want to do this land. We want to work part-time right now. You've got a mortgage. You said you've got some savings how much savings do you have um i personally have about 40 000 and i think he has about 20 000 okay and what about

debt um the only debt we have is our mortgage and we have another asset we have a camper okay the camper is not an asset yeah Yeah. Don't worry. That's going down fast. You're good. Oh, what do you owe on the camper? Um, probably about 10,000. Whose name is it in? Both of ours. Oh, shoot. All right. What do you owe on this mortgage? Girl, you're scary. I'm scared. Stupid. What do you, what do you, what do you owe on the mortgage um 243 okay um if you called me if if you i mean you did call me but if if a buddy said to you hey these are the the best financial advisors that you could talk to um and you called me on my personal phone when i wasn't on air and you said hey j Jade my friend recommended me to you this is my situation what would you do I'd say I'd immediately get off the mortgage I'd immediately

get out of this camper and I'd immediately separate separate my money that's what I tell you not because this guy's a bad guy not because you're headed for doom and a breakup I tell you that because I want to protect you and I want it done the right way. And I'd say, if this is his house and you want to move in with him, who cares? If he wants to buy a camper and you want to move in with him, fine, or vice versa. But do not put your money on these debts and these assets together before you're married. That's what I would tell you to do. That's what I'm telling you to do right now. This is The Ramsey Show. You're listening to The Ramsey Show. I'm Jade. Next to me is Dr. John Deloney. We're hosting. So if you want to talk to us, you can call in. The number is 888-825-5225.

But imagine this. Let's do a little exercise here. I can only imagine. Close your eyes. Take a deep breath. Imagine. You look up. It's a year from now. So September 2025. And you finally have accomplished the things that you said really matter to you. Whether it's you got out of debt.

You saved up three to six months of emergency fund, you started the practice of having a daily quiet time, you started the practice of journaling daily, you've actually done it, you've accomplished it. Here's the thing, achieving goals doesn't happen by chance, right? You need a plan that keeps you focused, you need a plan that's going to keep you motivated, something that's going to keep you motivated, something that's going to keep you organized every single step of the way. And lucky for you, we have just the tool to help you do that. Guys, the new 2025 Ramsey Goal Planner, it's here. It's packed with monthly teachings from Rachel Cruz, Dr. John Deloney, and myself. And they're going to help you set attainable goals with your money, your faith, your relationships.

You're finally going to be able to do it. Plus, it has a lot of really cool features inside of it. There's month and weekly calendars. There's stickers, vision boards, goal-setting systems. There's savings trackers in the back and more. And here's a thing. You can get yours today for less than $50. $49.97,97 actually is the price.

So if that's you, if you're wanting a great planner, and I'm telling you this is a great one. I've got one in the studio. It's great. It's hefty, heavy duty. Don't wait. This planner is in high demand and it's going to sell out fast. They sell out every single year. This year is no different.

So if you want one, go to ramseysolutions.com slash store, or you can click the link in the description if you're listening on YouTube or podcast and make it happen. All right, let's go to the phone lines. We've got Rick in Dallas, Texas. What's going on, Rick? Hi, Jade, Dr. John. How are you guys today? Doing good. How are you? Fantastic. What's up? Oh, well, I've got a dilemma I'm struggling with as to whether or not to spend money. I'm a reformed free spirit. My wife and I are in baby step seven. We have a net worth of almost $2 million. I got an unexpected windfall recently. I want to buy a truck. My wife says I can buy a truck, but I'm just struggling with the decision that it's okay to spend it. What was the windfall? How much? Yeah. It was $70,000. Okay. And that's above the $2 million?

Yes. Okay. So your baby step seven, $2 million net net worth plus you just came into 70,000 what's your income uh 200,000 excellent hey bravo oh and i'm i'll be 69 next month so i'm getting ready to drift off into retirement how long have you been driving crummy cars? Not long. We followed Dave's plan for the last 14 years and just bought my wife a new 2024 Highlander and I'm driving a 2012 Lexus and it's just that, you know, I got this money, you know, I'd like to buy a truck, but I'm just, I'm struggling with it, that it's okay for me to buy this truck. Well, let's go ahead. Yeah. Tell us the struggle. Well, I, I, on one hand, I feel guilty. I don't deserve it, but I, you know, on the other hand,

I just, uh, my, my wife and I worked very hard, uh, on the baby steps and getting to where we're at. Uh, we're going to be comfortable in retirement. And, you know, this was like, this money was totally unexpected. And it was a huge, huge blessing. I finally got my settlement with the VA, my VA disability. Okay. Okay. How much of it do you want to spend? Like if you, if you got the truck that you wanted, how much would it cost? Oh, it would be at least $68,000. Okay. You already have the color picked out. Tell me about guilt.

Why do you feel guilty? Just white. Yes, sir. Why do you feel guilt? Tell me about this guilt. I don't. I wish. I don't know where it comes from.

I mean, like I said, I'm a reformed free spirit. Did you hurt somebody when you were a free spirit? Beg your pardon? Did you hurt anybody when you were a free spirit? Nope. Nope. Okay, so what does a reformed free spirit mean? Well, I was the party person. I was the spender.

And now I'm was the spender and now I'm not the spender I like to when I spend I like to spend for other people and that sort of thing and so it's just like I said I don't know if it's guilt

I feel a feeling that I don't deserve it I don't know that any of us deserve what we got I don't think that plays into don't know that any of us deserve what we got. I don't think that plays into it. I'm more concerned with you not liking the man you see in the mirror. Wow. And often we get, it's a strange conversation when,

it happens on the road a lot. Someone will pull me aside and say, hey, I paid off everything. I have a net worth of X, Y, and Z. And here's the sentence that always comes after it. I thought this would quote unquote feel different. I thought that suddenly I would feel like I'm a good husband, like I'm a good wife, like I'm worth being a multimillionaire. And I just, I went with me is essentially where we land.

Oh, okay. And so if you're a guy who thought spending a lot and buying all cool, shiny stuff was going to bring out the you, you realized, oh gosh, I just spent me and my wife into a hole. And then if you thought, okay, I'm going to be the guy that never spends and that will quote unquote, fix me and solve me and make me worthy of being loved. You're going to become worth a couple million bucks. A $70,000 check is going to fall out of the sky and you're going to look in the mirror

and still see the same guy. And so all of this stuff circles around this ugly, kind of a gushy word called identity. You have to decide I'm worth being loved. I'm a good man. I'm a good husband. I serve my country. I've had to fight my country for what I think is rightfully mine.

I got it. And then you got to make peace with the guy you see in the mirror every morning. And if you're asking me, if you're asking Jade, both of us think you're a guy worthy of a truck. You're 68 years old, man. not now when and here's the thing like john talked about the gushy stuff let's talk about the ratios i mean there's we always say all the time there's three things you can do with money

give save it spend it are you giving yes okay are you saving i've given been able to get more more than i've ever ever anticipated my life, which is huge. It feels good, doesn't it? It feels great. Yeah. Perfect. Are you saving? Oh, yes.

Okay. And when was the last time you guys took an amazing vacation? Right at the beginning of COVID. Okay. So it's been too long at this stage in your life that is these things need to be happening almost in an equal ratio and that you know whenever you get a large lump sum of money like this you know i've heard dave say it and i agree you can take it and you can say okay i'm gonna give some i'm gonna save some and i'm gonna spend some and you can do that

in an equal ratio or you can you and your wife can and say, okay, how much of the 70K do we want to give? How much do we want to save? And how much do we want to spend? And something tells me that for you, it might make you feel better instead of spending all of it. If you say, okay, I am going to give some and I am going to save some. Something just tells me that that would give you a little bit more peace. Wrong or right? Yeah, I didn't consider that part of it you know and i'm not saying it doesn't have to be you know 25 25 25 it can be okay we're 5 000 we're going to give 5 000 we're going to save and then the rest is up to me i get the 60 000 like whatever it is that you want to do but the key is you have earned deserve is off the table but you

have earned the right to decide what you're going to do with this money and feel good about your choice. Can we frame it like that? Yes. Yes, absolutely. And Rick, can I tell you something? Yes, sir. This is putting my family business out there that I probably shouldn't, but I just feel compelled to say it. My dad was a policeman most of his life, his adult life. And for a big chunk of it, he was a minister. And now he teaches future policemen. You know what I wish more than anything?

He wouldn't have to drive such an old banged up truck. I wish he had a situation like you had where he could get a new truck. Like that would bring a smile to my face so big. Go buy yourself a truck, will you? All right, sir. Go buy yourself a truck. Hey, will you send a picture in for all of us? We'll celebrate with you. Go get yourself a truck, man. You're a good husband. You're a good man. And thank you for serving this country. You've earned it. Say it like that. This is The Ramsey Show. You're listening to The Ramsey Show. Next to me is Dr. John Deloney. I am Jade Warshaw. We are your hosts for this bit of time that we're here with you inside the Ramsey Network app. All right. This is a show about your life and money. So if you want

to call in, you can. It's a live show. The number is 888-825-5225. And we'll get you in where you fit in. Owen is on the line. He's in Chattanooga, Tennessee. What's going on, Owen? Hi, Jade and John. Thanks for taking my call. You betcha. How can we help? So I'm pretty new to this Ramsey stuff, probably about a month in. Just a little backstory. I just got married last month and I graduate in May and I should graduate debt-free. My wife is debt-free because she paid off all of her debts. And along with, you know, the busyness of getting married and, you know, going on honeymoons, I, me and my wife acquired some, not too much, but a little bit of credit card debt along with her car, which is about, so altogether we have about $7,500 worth of debt. So not much, but I recently found an opportunity to buy a really

nice 2017 Honda Civic with only like 51,000 miles on it for very cheap around like $2,000 to $3,000. I'm not sure why. Obviously this could just not even be a legit deal, but I know the person, so we're pretty certain we can get it. Okay. And I'm wondering if we buy this car, which we don't have the full $3,000 in our bank just yet. I make more than that in a month,

so we'll be able to get it between the next paycheck. Okay. But is it a good idea to buy this car and then turn around and sell it for the $14,000, even though if we can't sell it for a while,, the $14,000, even though it's going to, if we can't sell it for a while, it's going to kind of drain our bank account. And then along with that, sorry. Oh, okay. I'll wait, finish the scenario and then I'll go. I was just going to say along with that, we have two running cars, but my car is just about shot, but it does run for a

while. But, you know, then there's like the risk of maybe not having another car and we could just use that one. Okay. So you've got car number one that you owe how much on? It's my wife's car and it's about $4,200. Okay, $4,200. And then the rest is on the credit cards. Tell me the number on credit cards. It's scattered between a couple of cards,

but it's about $3,100 to $3,200. Okay, yeah. Okay. And then there's a Civic that is really worth $14,000, but your buddy's saying he can sell it to you for $3,000. Is that right? Pretty much, yeah. And, of course, this could just not even work out. It feels sketchy, yeah.

Is there a body in the trunk? Why is he selling it for so cheap? That's what we're going to go find out this weekend. But I'm just trying to plan ahead of time, like, if it does work out, and I just bring cash and buy it now and get a really good deal. Because here's the thing. It doesn't make sense. If somebody is selling something, it's because they want the money.

If they want to give it away, they give it away. And this is, like, right on the line of giving it away, that I'd be like, why wouldn't they just give it away? Yeah, pretty much. Let's do some more due diligence into that. I don't want you to assume that you're going to buy this for 3000 and turn around and sell it for 14. Um, now if you bought it and you're like, Hey, we're going to sell this because my car, we're going to buy this because my car is a piece of junk. Possibly. Let's talk a little bit more

about your car. Um, tell me what the situation with your car, uh, it's paid for, but what's it worth? Uh, I think on Kelly blue book, it says it's about barely $3,000 car uh it's paid for but what's it worth uh i think on kelly blue book it says it's about barely three thousand dollars but it also has like a rebuilt engine i put so much i put about ten thousand dollars in it to it within the past two years and i'm just about sick of putting money into it and it still doesn't run right it runs fine right now other than uh every now and then i'll have like my power power steering goes out as if my battery's going out. And then also my AC doesn't work. So right now it's fine.

Dude, you put $10,000 into it. It better run all right. I pay way more. It's mainly on, I think it's like engine mounts or something. And they were about to break or something. It's just I'm tired of putting money in it. Okay, but you don't need a car it's running fine now oh yes no it is not a need to go buy this car i'm just trying to decipher where you're at because i think you hate the car and you're mad at it

and you you you don't want to look at it anymore because it reminds you of remember that time you put ten thousand dollars in me it's possible. That's possible. If you sold it, would it just get scrapped or could you get anything for it? It would probably get scrapped. I can't imagine knowing the full history if somebody would really buy it thinking it's reliable. Yeah. And I'm not even planning. I mean, I would feel like the better idea because my car still runs would be to flip this car if it's a valid sale. And so another thing is my wife, like we just got married, so she had no idea I was wanting to do any Ramsey stuff,

and I didn't either until probably about two weeks since we got into marriage. Okay. And so another thing is she probably wouldn't want to sell the car if we do get this. How can I kind of push her onto the Ramsey stuff without kind of switching up on her too much? Well, don't switch up on her. Why would you have to switch up on her? You're saying because you're kind of a different guy now, like you're viewing finances differently? So, yeah, not switch up necessarily, but like once. So we're basically on baby step two trying to pay off debt.

You are. And then once we do that, do what? I said, yeah, you are. And do you have money saved? Do you have any money saved? I have about $1,800 right now. We did have $3,000, but we had some expenses. So I have $1,800 now, so the first $1,000. And then we're on baby step two, which shouldn't take us too long.

I was thinking with the car, if we could flip it, it could be done by next month. Well, let's reprioritize. I want to make sure our priorities are in order. So you're in baby step two, 100%. You don't have a lot of debt, and this is your buddy selling the car. He's clearly not hard up for the cash. Can't you just say to him, hey, I got to clear out this debt right quick. It's going to take me four months.

And then can you sell me the car? Okay. That's what I would do. He's clearly not, you know, trying to make a hurry on this. Dude, I think there's no chance this works. Yeah, I definitely understand that. And so that's why I'm just trying to get a game plan before it just moves. Here's the game plan.

You're like me. You know how we are? We dream of a scenario, and then it could maybe, like there's a less than 1% chance the scenario works out, and you're an eye problem. We take that scenario,

and we multiply it by like four or five, and then we already spend that money in our heads. And then when reality exists, the other 99.9 chance like like shows itself we get we feel like the world took something from us yeah so here's the deal this is not going to work it's just no chance it works and i would love to be wrong to the tune of 11 000 bucks i'm not this isn't going to work and i want you and your new wife to just go earn $7,000 and pay this off. Yeah.

It's just not a ton of money between the two of you. Does she have a job, or is she still in college also? She isn't, or no, she's graduated, but she works in daycare, so she doesn't work during the summer. But right now, she does have a job. Together, we bring in $4,900 a month, but we have like $1,500 of rent, but we bring in tons of money, or not tons, but plenty. Is she a college grad? Yes.

Why is she working at a daycare just nine months out of the year? It's like, you know, Chambliss? It's like a daycare for, it's like teachers. So she's working in the school system, and she graduated with like just applied science. It wasn't like, or so I don't know if that counts as college grad but it was like an associate okay she's like a teacher's aide kind of pretty much okay all right that's that's great okay uh i think y'all sit down and like jade was saying y'all come up with a game plan on how to pay this off and there's no trickery there's no there's no shell game here we'll gift you um financial

peace university as our wedding gift and y'all can sit down and watch these nine lessons together and go through it but y'all gotta be on the same page brother otherwise this is just a shell game you're gonna buy this car it's gonna fall apart on you you're gonna have another car in your driveway you're gonna end up putting 10 000 bucks into that like your other car just just just stop the madness and just do it straight up man these are two separate issues there are two separate issues and one may be a non-issue the first issue is yeah you want to pay off the 7500 of debt great you've got the income to do it you'll be out of debt in three

months period done next thing is do we need a new car if you do i'm not sure that you do you don't but if you did i don't think so as of yet okay but if you did i'm saying then you would just wait and your buddy will hold this car. And you can investigate it, see if it's a good deal, pay cash for it. But I don't think you need a new car. I think you just saw this as a way of getting out of debt. And now that we realize that that part's off the table, I think the whole thing is off the table. Yes.

And by the way, on the less than 1% of 1% chance, Jade, America, Owen, everybody, if you go talk to your buddy, which, again, I don't know why you even have to go talk to him. You can talk to him on the phone. But you talk to your buddy, and the buddy's like, look, I have this $14,000 car. I don't want to deal with it. I'm just going to get rid of it.

You got $3,000. You got $2,500. If that's a real thing, then yes, of course, you would be dumb not to take this. Well, If that's a real thing, then yes, of course, you would be dumb not to take this. Well, if it's a real thing, he needs to be a good broski and say, dude, you know this is worth $14,000. Get your money.

He'd be like, dude, I just want to deal with it. Here you go. I just don't know any, because he could do that with $5,000, he could do that with $7,000, so I'm still going to buy it tomorrow. A car that's got that great of a reputation.

I'm calling not real, but maybe I'm wrong. You're listening to The Ramsey Show. Thanks for listening. Hey, our scripture and quote of the day is this, Colossians 3.12. It says, as God's chosen people, holy and dearly loved, clothe yourselves with compassion, kindness, humility, gentleness, and patience.

Ooh, I'm gonna let that sink in for a minute. I think people need to hear that one more time. I know. We need to be clothed in compassion, guys, kindness, humility, gentleness, and patience. And I'm speaking to myself right now. All right. Rob Siltanen?

I don't even know who this is rob said this people who are crazy enough to think they can change the world are the ones who do and i got another quote what's his last name great james childs what's that john delaney i think you're a handsome guy thanks james that was the other other i have a quote from James to you. What is it? Clock. Well played. Well played. Okay. I did that to divert the attention away from the fact that I could not pronounce this man's name. Sultainan? I don't know who that is. If you know who it is, put it in the comments. All right. Let's go to Tyler in Jacksonville, Florida. What's going on, Tyler? Hey, how's it going? I'm 29 years old and I have no debt currently. I have about 50K in like a checking account or liquid assets. I'm looking to go to PA school in about a year. My question is, do I pay down my student loan before I buy a house or do I rent in the

meantime before I buy a house and just pay down my loan? Okay. So we're talking about a lot here. We're talking about going to PA school. Listen, you flipped the script. You just turned it like a page. Okay. That was incredible i got no debt do i pay off my student loans yeah uh okay so 50k liquid you're going to pa school with uh you've got student loans already how many student loans do you have already no so i don't have any student loans currently but i'm going to be taking out about a hundred thousand why my guy uh it'll help increase my income by like two times but I'm going to be taking out about $100,000. Why? My guy. PA school, it'll help increase my income by like two times.

Which will get you to what? Worth while investment. No, PA school is awesome. I want you to go be a PA. We need more PAs. You have $50,000. Why don't you just pay for it? It'll only take care of about half of it.

Yeah? And so then you'll work your way in the same way you save the 50k you'll save up another 50k and pay cash what's wrong with that no risk so i should rent in the meantime yeah of course okay are you working now what are you making now let's talk about your income now i currently work i make about 4K a month take home. Okay. What do you do? I'm a CAT scan technologist. Okay. I work in a hospital.

Okay. Can you work OT and on weekends? I don't because I'm currently going to school part-time to finish up the prerequisite for PA school. Okay. Okay. So let's talk through this because John actually gave similar advice to someone earlier. currently going to school part-time to finish up the prerequisite for PA school. Okay. Okay. So let's, let's talk through this because John actually gave similar advice to someone earlier. It might take you a little bit longer and that's okay if you can pay cash for this. You don't have

any other debt, right? You're completely debt free. Correct. What are you paying for rent every month? I pay around $1,800 for rent. Okay. So that's getting you pretty good right now. It's almost half of your take-home pay. Yeah. And then the next thing you said that you mentioned in this wild ride was saving for a mortgage, right? I'm sorry, say that one more time. The last thing you mentioned was buying a house. Did I hear that? Yeah, that's what I want to do after I go to PA. Okay. So that's further on down the line. Great. That's exactly where it should be. Listen, number one, you're debt free. That's great. Let's keep it that way. You've made some great decisions to get here. You've got some really good instincts. The fact that you have

$50,000 saved lets me know, listen, I know how to delay gratification for a while. The fact that you don't have debt right now also lets me know that. Let's stay on that road because that road is what got you here. If you start to divert and go down another path, you're not going to end up in a very smart place. And John and I are sitting here telling you, listen, everything you've done is right. But if you make this choice, it would not be a right turn. It would be a wrong turn. Can I paint a picture for you, Tyler? Is that cool? Sure. right but if you make this choice it would not be a right turn it would be a wrong turn can i paint a picture for you tyler is that cool sure there's a hundred percent chance you can get off this phone you can laugh at us uh this phone call you can laugh at us and you can go take out your student

loans you'll be in pa school in the fall and everybody goes on about their day yeah all of your classmates will have taken out loans and you can just do that. I, a big chunk of, not a big chunk, a number of my friends are, are medical professionals and I love them and they're, they're amazing people. And the number of stories I hear about folks saying, I have to keep working this particular job. My life changed, but I can't do X, Y, or z because i owe this much money oh a hundred grand i have 300 grand whatever or my hospital just shifted hours on me or they're making me prioritize this script this particular medication that i have to write with this like i've got to keep doing x y and z and i have to because I owe this money.

And here's the script flipping the script. Let's say you put off going to school or let's number one, let's say you start shopping instead of just getting the one school that you want to go to. Cause I've never asked a PA where they went to school. I asked a PA, are you a licensed a physician's assistant in our state? So let's say you shopped. That's number one. Let's say you put off admission for one more year and you saved up 50 grand. You go to school debt-free. You pay cash for it. Then anybody who asks you to do anything you're uncomfortable with, you don't like, that's outside of the world, you want to create for yourself, you smile and you say, have a great week. I'm going to go somewhere else. I love the idea of physicians, medical assistants, nurses, PAs, everybody

not being in service to this debt so that they can begin to practice medicine with their conscience, with the data, with what the medical community actually believes versus what they have to do because of all these other factors. You hear what I'm saying? Yeah, I understand. And that's just me. Those are my friends. Those are the students I've worked with for the last 20 years. That's just been my world of people getting trapped, man. And more so than anybody you're going to meet, I'm high on education. I'm high on higher education. I'm a huge fan of it. I'm a huge believer in it. I want you to go to PA school.

I need good PA folks. And you've already shown you're a saver. You're a guy who thinks ahead. I love that. I want more PAs like you out there. Please consider not shackling yourself to some loan service provider that's going to dictate your life for the next however many years you have to put off buying a house you're gonna have to put off starting a family you're gonna put off all these things because you owe this money that man if i just made a few adjustments i could just pay with cash and then walk away i know that's right that's just me preaching at you dude you can do what you want to we wish you the best but i want you to consider those words man i hope they worm their way into your brain you can practice medicine free um and i just i love the idea of these integral important professionals unshackled to banks that's a good point john you know same

with artists you can't create art if every month you got to pay us a loan provider well it changes the way that you think it changes the way that you think. It changes the decisions that you make. Everything is filtered through what I got to do in order to make this right. As opposed to when you don't owe anybody any money, your mind opens up. That space is not being occupied by debt. It really basically is what we're saying. I really like that way of thinking.

And then there's this other part of it that, you know, I feel we're saying i really like that way of thinking and then there's this other part of it that you know i feel like we can get really like uh just lackadaisical when we talk about it was a hundred thousand dollars like it's nothing like we just say a hundred thousand dollars like i'll just pay that off and yes you can pay it off but john you and i both know when you are making those payments it is not fun like there is nothing fun or easy about just being like yeah even if you have a good income there's nothing fun about the work that you do every day for eight to ten some of you 12 hours a day and then all you have to show for it is writing a check or going online and making it go down a dark internet hole to you know ACS or whatever these loan providers are that is not fun

and especially when you've worked so hard to finally get the dat gum degree you finally get the paycheck and you don't even get to see it you don't even get to see it. You don't even get to let it, you know, influence your lifestyle in a positive way because you have to pay back these stupid student loans. Don't talk about this like this. It's just this language thing. That's no big deal. Student loans and debt is a big deal. And if you think that if you don't realize that, then you haven't been in debt before

and you've never had to struggle out of it before. Don't do it. I'm scared for him. I hope that he listens to us because we know what we're talking about. Thanks for hanging out with us. This is The Ramsey Show. Take care.