The Ramsey Show - App - Why Newlyweds Should Rent Instead of Buy (Hour 1)

Episode Date: July 29, 2019

Debt, Home Buying Tools to get you started: Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE   Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios. It's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show. Thank you for joining us, America. We're glad you are here. Open phones at 888-825-5225. That's 888-825-5225. Dan starts off this hour in Canada. Hey, Dan, how are you? I'm better than I deserve. How about you? Oh, just the same. What's up? Well, I'm one of your financial master coaches, and I just wanted to get your opinion and see if my advice was right. I have a lady who is on disability, and the constraints of her disability say that she cannot have more than $3,000 in her savings account.

And otherwise, her disability payments decrease. She's gone through Baby Step 2. She is currently renting, but she wants to own a house. What is the nature of her disability? I haven't been able to get that from her. She said it took her three years to qualify. And she is afraid to go off a disability because if she does and she has a relapse, she's going to wind up not being able to get back onto disability.

So basically she can borrow as much money as she wants and as long as she can pay it and that's fine with the government but if she has more than three thousand dollars in her savings account uh then they start cutting her benefits right so the the thing is she's got an insurance settlement coming in that will allow her to put a significant down payment on a house. And she's allowed under the disability rules to own a house. And then she can make the payments out of it. She wants to do like a duplex and rent the other side, and she's allowed to have passive income. So my advice was to get the insurance company to pay the down payment,

and then she uses the rental income to pay off her mortgage, which she could pay out of her disability payments as well. How much is her disability income? I couldn't. We just started talking, and I haven't got exactly the numbers. Well, when I'm facing these things, what I look at is if they're trapped in the disability income, which is what we're describing, then we either have to say we're going to live our life on that income because the disability, the nature of the disability is so extreme that this is our income and we're going to make this the rest of our life because that's our only shot.

And so we've got to acquiesce and fall within these things. Oftentimes, though, I find people who the nature of their disability allows them to have a different kind of a career that makes them a whole lot more than they would have gotten from disability. And I would rather them have an encore life here and, you know, take another bow after the disability hit. Now, again, it depends on the nature of the disability. If someone is completely, you know, just, you know, in a situation where they can't do anything, then, you know, you've got to just stick it out, right? Right.

But if they're facing, like, depression and, you know, they got declared disabled for that, then, hey, let's work to get rid, you know, let's work with a good set of prescription drugs, with a good counselor, with a good doctor, and let's work our way through that. Lots of people do and then go on to have fabulous careers. So what I really would like for her to do is not be trapped in disability. I'd rather have an encore career where she makes three times as much money and she can just go, I don't care what the government says, just drop the disability, let's go on.

But she's fearful about that for some reason, and you've got to dig into that. So there's really no middle ground. You're not going to prosper with a limited income and a limited ability to save. And the government is ensuring that you are their slave at this point with this program. And so, you know, or you can say, I'm going to cut the tether and we're going to go adrift and we're going to put this game plan together in order to be on our own. And those are really the only two ways you can get at this. Joe is with us in San Francisco. Hi, Joe.

How are you? Hey, I'm doing great. Thanks for taking my call. Sure. What's up? Quick question. I think I have the answer figured out. I just wanted some reassurance from you. So I'm 30 years old, married with two kids, and besides our house that we own, we have no other debt.

So we're pretty much working on baby steps three through six. Way to go. Thank you. So my question is, we've been having a lot of problems with our house lately, so we've been having to dip into our emergency fund. And I'm down to my last $600, and I'm being told that I need a new water heater and new parts with my AC, so probably about $1,500. My question is just, should I wait like two months, praying that nothing, you know, praying that they last those two months?

And I could probably pay those off because out of my net income a month, I save about $500. That goes towards our house, paying that off early and everything. So should I take that $500, save it for two months, pay off that, you know, pay off the water heater and AC, and then probably... It's not pay it off. You're saving up and paying for it. Yeah, exactly. Because I don't want to put it on a credit card. Exactly. It's not pay it off. You're saving up and paying for it. Yeah, exactly. Because I don't want to put out a credit card. Exactly. That's exactly what I'd do.

I'd pay cash for it. And, you know, you're getting down to the edge with no savings here. It's a tight, scary situation. So I hope nothing blows up over there. It could be a long month. But the other thing I'm going to do is I'm going to lean into this and say, is there anything around I can sell? Is there an extra job i can pick up for a month that accelerates this um what can i do to you know temporarily give an injection uh you know an adrenaline

injection into your cash flow here to get this thing where you can do this but yeah i'm not going to tell you to borrow if i were in in your situation, I wouldn't borrow. I've been in your situation and I didn't borrow because I decided I'm not going to borrow anymore. I'm not going into debt anymore. It changes everything when you do. So, hey, good question. We appreciate you joining us. Open phones at 888-825-5225. Scott's on Instagram.

Is a separate pet emergency fund good to have if you're going to own pets? I'll be debt-free at the end of the year. I'm looking to get a dog, but I want to do it the right way. No, I think your emergency fund will cover your pet. It always has mine. We've had dogs or dog ever since we got married and love animals. And, you know, you go through some heartbreaking things with them. I just lost a golden a few weeks back.

And, yeah, you just, you know, you love them, but you have to also use some common sense and remember they're animals. And while we love them like a member of the family, we're going to remember that they're animals. And so we're going to spend reasonable amounts on them. And reasonable amount is in ratio to your wealth. If you're extremely wealthy, you might spend more on an animal. But if you're broke, you know, you're not in a position to do that.

And that's when you make some choices. But most of the time we make the choices for the good of the animal. And they're difficult. But, yeah, you cover that choices, but most of the time we make the choices for the good of the animal. And they're difficult. But, yeah, you cover that with your own emergency fund. I would not have a separate emergency fund just for a dog. I wouldn't do that. Hey, good question, though. Thanks for joining us.

This is the news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal. Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again.

A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to churchillmortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run call 888-LOAN-200 that's 888-562-6200 or churchillmortgage.com Devin is next in Houston, Texas. Hi, Devin. How are you? Hi, Dave.

I'm great. How are you? Better than I deserve. How can I help? So I have a question about a car lease. Okay. My husband and I make about $90,000 a year gross. We have no debt, no children.

We live well below our means. Our total absolute necessity cost every month is right around $2,000. We bring home around $6,000. And my husband wants to lease a cheap car, something like a Hyundai Elantra or something like that, and I want to know if I should say yes to it. Why? Well, because we've always bought cars that were about 10 years old, paid about $5,000 cash, and they've always given us problems.

The one I have now is about to lose its transmission. Do you have any money? He's just tired of that stress. Yeah, he wants to buy a new car. He just wants to buy a new car. You don't have the money? And I think he's just tired of that stress. Yeah, he wants to buy a new car. He just wants to buy a new car. You don't have the money to buy the car? We could if we wanted to deplete our savings, and I'm not willing to do that. How much is in your savings?

Right now, about $15,000. Okay. No, I wouldn't take it down. Is that your only savings? That would be your emergency fund and everything? No, our emergency fund is separate. How much is that? We have about three months' worth of expenses in the emergency fund.

Why would you not spend the other $15,000 on a car if your transmission is going out on a car? I guess because I have a really unhealthy relationship with money. I grew up very, very poor. I've never really had a sensible income. I grew up very, very poor. I've never really had a sensible income before. So why would you want payments then? I don't know the answer to this question. He really wants to lease a car.

Okay, well, let me start. Let's go at this another way, okay? Leasing a car is financially stupid. Okay. It's the most expensive way to operate an automobile, according to Consumer Reports, Smart Money Magazine, and MyCalculator. It is the most profitable way a car dealership can sell you a car. They make more money on the contract of the lease than they actually do spread of profit on the car. Plus, you're buying a new automobile, which is going down in value like a rock. Now, I don't want you to go buy a $5,000 junker anymore.

I get that you're tired of those. I get that you make tired of those i get that you make ninety thousand dollars but i would go buy a fifteen thousand dollar really really nice one or two year old car and get over yourself on your worry about your childhood or whatever you make ninety thousand dollars a year you don't have any payments you've been very responsible but But no, I would not. Leasing a car is just a, it's financing a car at 15% interest. A new car. A new car that goes down in value faster than anything else. See, take a $20,000 car, $25,000 car, okay? That car is going to be worth $10,000 in 48 months. That's straight up stupid.

Okay. Unless you're worth over a million dollars, you should not buy a brand new car under any circumstances, but you should never lease a car under any circumstances at all, because all it is is financing the car. You're just borrowing the money. You know, you guys have worked... So a two-year-old vehicle is fine. That's a good purchase?

The typical millionaire, until they become a millionaire or greater, drives a two-year-old or older car that no one knows they're a millionaire, and they pay cash for them. Most of the loss of the value occurs in the first one to two years. I mean, think about it. The worst car accidents happen on the showroom floor. As soon as you drive it off the curb, it has dropped in value, right? Right.

By the time you get it home. I mean, we all know this. It's kind of common sense. But what's happened here is, is you guys have saved up the money. You're clutching the $15,000 with both hands until your knuckles are white. And he's tired of messing with these dadgum, half-butt, breaking-down cars y'all have been driving. And you make $90,000 a year. So he's got a right to be disgusted with that part of it.

But his reaction, due to his disgust, is taking him into the land of stupid. Is that logical? Do you see what I'm saying here? Yes. So it's not a stupid man, but he's getting ready to do a very stupid thing land of stupid. Is that logical? Do you see what I'm saying here? Yes. So it's not a stupid man, but he's getting ready to do a very stupid thing out of frustration. Yeah, and I was just hoping I could let him do something stupid as a way to make him happy. No, no, no, no, no, no. Never let someone hurt themselves or you as a way to make them happy.

That's just enabling. That's codependent as it can be. Go look up that exact car. What did you say, a Hyundai Elantra? Yes. Or Sonata? Those are great cars, by the way. They're high quality.

All the reports on them, they're right up there with like a good Honda Accord. They run, run, run, run, run, run, run. I mean, they do really well. But go look at what a two-year-old one is versus a brand-new one with, you know, 15, 20, 30,000 miles on it. Okay, no miles. Just get something real low mile. You might find something with 10,000 miles on it. And look at its stinking half.

I mean, half. I mean, I did look, and it seemed like it was only somewhere between $3,000 and $6,000 difference from you. You're looking at dealer lots. Right. Yeah, see, they're trying to sell new cars. They've got the used car prices high. Jump online and do a little research on just used cars, straight up buying a used car in your area. You'll find these depreciations to be very, very heavy.

So anyway, what would I do if I were in your shoes? All the data points tell us that the millionaires buy used cars until they're millionaires, and they pay cash for them. Avoid a car fleece at all possible, in all possible scenarios. It's a really, I mean, when you put the thing in a calculator, and you know how to run the calculator, it'll make you throw up. It's horrible. Bob is with us in Louisville, Kentucky.

Hey, Bob, how are you? Great. Good. How can I help? Glad to be able to talk to you today. You too, sir. What's up? Well, I've been laid off again. I'm not in a hurry. I'm not hurting.

But I'm also not ready to retire. So I'm trying to figure out what to do with my life because I keep getting laid off. I'm in the education field. And this fellow I know, he's thinking about retiring and his family doesn't want to take over his locksmithing business. And he's offering the business to me and he's willing to train me. And, you know, it's so different from being in a classroom, and I'm trying to figure out whether that's something that's worthwhile doing. Okay, cool. Is it mobile, a mobile locksmith?

Yes. Okay, good, because that's going to be necessary in today's world. How old is this guy? This guy's getting ready to retire. Yes. Okay, and then he that's going to be necessary in today's world. How old is this guy? This guy's getting ready to retire. Yes. Okay. And then he wants to sell you the business. Do you have any idea what the price would be?

He's asking $30. Why? What's that based on? We haven't actually discussed how he's evaluating or evaluating his business, but he has mentioned he's made six figures in the past. I think he's brought it down because as he's gotten older, he's done less and less work. Let's stop on business valuation just a second and camp there.

The minimum a business is worth, the floor, the least price, is what he could sell off the parts of the business for, the equipment. If he sold off his inventory and the equipment and just closed it, that's called book value. And so it's worth that or more. The way it's worth more is if he's been making a profit after having paid himself a reasonable salary. But if all he's getting out of it is a reasonable salary, he just owns his job.

He doesn't own a business. So if he's working 40 hours a week and the business is generating $100,000 a year, I suspect if he sat at home, he could hire someone to do all of that work for, say, I'll just make up a number, $30,000. Okay? So just as an example here, if the business is making $100,000 and you could hire someone and be an absentee owner to run the thing for $30,000, then the real profit in the real world is $70,000.

Do you see how I'm doing that? Yes. And then the business would be worth about four times that number. So I suspect... Four times the $70,000? Yeah. I suspect it's not making anywhere near that. Net profit.

Net profit is what we're looking at. I suspect $30,000 is a reasonable price. If you can pay cash for it, I don't think that's a bad thing to jump in there and learn and pay cash for it. But figure out why he wants $ and when he wants 30 and no we're not borrowing money to buy the business under any circumstances lastly be sure you're studying technology changes in the locksmith world because everything is being affected by technology now Thank you. Michael and Darlene are in the lobby of Ramsey Solutions. Hey, guys, how are you?

Hey, good. Oh, we're great. How are you? Welcome, welcome. Good to have you. So, where do you guys live? Yonkers, New York. Bit of a haul to Nashville.

Yeah. Well, welcome to the South. Good to have you guys. And all the way down here to do a debt-free scream. I see it on your shirts here. Hashtag debt-free. So game on, right? How much have you guys paid off? $40,000 in 12 months. Good for you. And your range of income during that 12 months? We started at about 80 and it went up to 110. Cool. What do you guys do for a living? I am a purchasing manager for a small business in White Plains.

And I'm a private investigator. Oh, very good. Okay. So what kind of debt was this $40,000? Mainly student loans and about $2,000 in credit cards. Okay. Very good. Very good.

So how long have you guys been married? About three years now. Okay. How good. Very good. So how long have you guys been married? About three years now. Okay. How old are you? I'll be 28 next week. Yeah, we're both 27. Yeah. Okay.

All right. Good. So a year ago, something changed. I mean, you're going along, you're married, and everything's going good, and boom, we're going to get out of debt. What happened? Well, yeah, we've been married for about two years at the time, and we had a decent amount of money saved up, but we weren't quite sure what to do with it. So we turned to some close friend of ours. Um, shout out to the Palmers, Dwayne and Shannon.

They've been absolutely tremendous in our journey, our financial journey, um, along with Pastor Ray and, um, Living Word Christian Church. They've just been fantastic, and we love them to death. But yeah, so we turned to the Palmers, and they said, hey, they just finished FPU. So they said, put the money towards the debt. So we took the money we had, and we paid off our credit cards in like $2,000. We're like, hey, we're debt-free, right? And they're like, wait, don't you have student loans?

We're like, oh, we thought. Wah, wah, wah. Thank you, Debbie Downer. Yeah, so they were like, that's part of it. And we were like, oh, because we thought, just like everybody else, that student loans stay with you forever, right? But yeah, so in the meantime,

we also needed a second car. So yeah, we took the money that we had and we bought a new car we paid cash for a car but we didn't have a full concept of your program so we kind of spent everything that we had and we didn't have any emergency fund or we had nothing left and that kind of left us very vulnerable and it's pretty scared so we were, why don't we get the full information? And that was kind of the turning point. So we bought the book.

I read the full book in a couple of days. The Total Money Makeover? Yes, the Total Money Makeover. All right, good. Darlene was a bit reluctant to read it right away at first. But, yeah, once we got into it, yeah, it's just we got really intense. We made a chart, and we listed all of our debts, smallest to largest. And, yeah, that focus intensity really. So a little bit of fear from not having any money due to spending it all on the car.

That was like the wake-up call, right? Yes, absolutely. Yeah, and that gets you moving. That was the electric prod that moved you out then. So, Darlene, what got you to read the book? How did you come around on all that? Well, I always liked the idea of obviously saving and putting money towards the debt. But it was very hard for me because I love to shop for the kids.

Sure. I like to go and get toys whenever I would like. Sure. But when we started to put money towards our debt, since the majority of the debt was my student loans, I liked to see how my monthly payments were like decreasing decrease every month so i was like all right if i fully commit to this we'll be done in no time so that's when i was just like all right i'm all you can look at the numbers to see a year like it's do it you know boom on game on there we go all right cool good

for you guys well i'm proud of you. Congratulations. How does it feel? Amazing. Oh, it's amazing. Yeah. A relief. So now that you've kind of gone through the sort of doing it and then going all in and knocking it all out in 12 months, what do you tell people the key to getting out of

debt is? Well, your principles and the concept is so simple, you know, it's easy to understand, but people's lifestyles, they don't really follow it because society tells you how you should spend your money, and there's so much that will take your money. So just really understanding what's important and really focusing on taking care of what is really important and getting on the budget as well.

Budget, yeah. Budget is a huge thing. So as you got down into it and you were having a hard month or a bad time in the middle of well. Budget, yeah. Budget is a huge thing. Yeah, that really helps us. So as you got down into it and you were having a hard month or a bad time in the middle of the 12 months, what was it kept you going? Just knowing that it's only hard for now.

It's only temporary. The pain is temporary. Yeah, the pain is temporary. Within a couple of months we're going to be debt free and everything is going to... So just knowing that that end goal was near was just

the greatest thing. That'll do it. It's hope. You can see the light at the end of the tunnel and it's not an oncoming train. We can do this. That's very good. We were able to finance our daughter's fifth birthday. To a big elaborate birthday,

we were able to finance a new car. I need a new car for work. And we're able to be a lot more generous and free with our money now that we don't have any payments. Yeah. You're in great shape. Congratulations.

So do you have people cheering you on or people saying you're crazy? A little bit of both. Yeah, a little bit of both. When we first started, it was a lot of people that was like, because we did the chart. And they were like, oh, what is the chart going to do?

And I was just like so negative. Some family members, they were like, okay, you made a chart. What's that going to do? Yeah. But the people who understood your principles, they knew what we were doing. Who was your best cheerleader? The Palmers. Yeah, at the church.

The people who gave us the information, they were extremely instrumental. They supported us, continue to support us throughout the whole process. Yeah, absolutely. Yeah. Good. Very cool. Good for you guys. And you brought the kiddos with you.

What are their names and ages? This is Sonny. He just turned two yesterday. Ah, perfect. And Mackenzie is five. Okay. Very good. Very cool.

Good. So they made the trip all the way from Yonkers with you. Yes. And they'll remember this day. Well, at least Mackenzie is five. Okay. Very good. Very cool. Good. So they made the trip all the way from Yonkers with you. Yes. I'll never remember this day. Well, at least Mackenzie might. Okay. Good deal. All right.

Michael, Darlene, Mackenzie, and Sonny, $40,000 paid off in 12 months, making $80,000 to $110,000. Count it down. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream. Three, two, one. We're debt-free! There we go. This is how it's done right here. Man, nice job, you guys.

Very, very well done. Very well done. Our question of the day comes from Blinds.com. They have a 100% satisfaction guarantee. That means even if you mismeasure, if you pick the wrong color, they will remake the window blinds for free. They have site-wide savings happening right now and an additional 5% off at Blinds.com. If you use the promo code Ramsey, Blinds.com slash Ramsey. Christopher in California says, where should we save our money for a house

if we plan on paying cash or a large down payment? Well, the suggestion that we use with very rare exceptions is that you're going to buy that home in under five years. Probably more like three years.

You're saving very aggressively to get that large down payment or maybe even paying cash. And anytime you're under five years, I do not use mutual funds. I don't recommend mutual funds because they go down in value. Now, I personally might use a mutual fund, but I can accept the hit if it goes down. And so, but I don't want you to put in $100,000 or $50,000 and the market moved down 5% and you, you know, you lose two, $3,000. Two or $3,000 is too hard to come by.

And that's really what you're putting at risk when you do that in a mutual fund. And so the money, the extra money that you would make during that short period of time using a mutual fund maybe is not worth the risk that you would lose even more. So it's not like you're going to lose half your money. I don't see that. I mean, you might just lose a little bit, but it's just too hard to come by. And if you make money, you're not going to make that much. You might make a little bit. So I'm just going to use a money market account. I just park short-term savings in a money market account, which means you're making nothing. I mean, they pay nothing, right?

They pay, what, 1% or something. And so you're not going to make any money on that. And the purpose of this is not to make money because it's a short-term. The purpose is a safe place to park it and to watch it grow as you add to it so you can buy that house you gotta have that little chart going just like they said right that's how it works so hey good question thank you for following us this is the dave ramsey show Thank you. Cassidy is on Twitter. Dave, is it better for newlyweds to rent or to buy? Rent. If you rent for one year, if you're a brand new young married couple,

you make a better decision on what kind of house to buy. You just know each other better after your first year. First year of marriage is wild. It's weird. It's crazy. And it takes about a year of marriage to know how close to your mother-in-law to buy. You just get to know each other better. Unless there's some extenuating circumstance.

And I want to buy a house. Houses are going up so fast. I have house fever. That's not extenuating circumstances. That's you being a twerp. Okay? But no, just 99% of you need to wait a year. Now, in addition to that, no one should buy a home until you get out of debt

and you have your emergency fund built with three to six months of expenses plus your down payment. No one can do that, Dave. Yes, they can. And that might take you longer than a year. You get married with a couple student loans and a car payment, and you've got entry-level jobs or beginner jobs, it might take you longer than a year to get out of debt and build your emergency fund, build your down payment.

So that's going to delay you anyway. If you do not wait to get out of debt and build your emergency fund before you buy, you are inviting trouble. Murphy will move in with you and bring his three cousins, broke, desperate, and stupid. You move in a house with no money and a bunch of debt the water heater will go out the heat and air will go out and the roof will leak in the first three weeks you're inviting trouble you're begging for problems and now you got financial strain on your brand new marriage that's just stupid on steroids so don't buy in the first year and don't buy even then until you're out of debt and have your emergency fund plus three to six months of expenses.

It's okay if it takes you a couple years to do that. Do it as fast as you can. I want you to buy a house, but I don't want the house to own you. I want you to own it. Brandy's in Jacksonville, Florida. Hi, Brandy. How are you? Hi, Dave. I'm great.. How are you? Hi, Dave.

I'm great. Thank you for taking my call. Sure. What's up? So currently, my husband and I, we have separate bank accounts, and we really handle our finances completely separately. We split the rent and utilities, but everything else is on our own. I brought $60,000 worth of debt into the marriage, not including my student loans, and I'm going

to start the debt snowball method to pay it off slowly. I'm also starting grad school next week, and we're expecting our second child. You're starting what next week? Graduate school. Graduate school. And you have a baby on the way. And you're in debt. Yes.

And you make $60,000. What are you going to study in graduate school? A nurse practitioner. Oh, okay. All right. So I'm wanting to get my husband on the same page at me as far as budgeting but i'm having difficulties even though we're in a paycheck to paycheck situation you know he'll tell me he's gonna budget better but then he'll still eat out or spend unnecessary money and i'm not comfortable getting a joint account with him and we're on the same

page budget wise okay all right let me just tell you this is not going to good places i've been doing this for 30 years and what you're telling me is not good it's a lot worse than you think it is the two of you immediately need to address this in your relationship you're're acting like you're roommates. For God's sake, do you split who buys the mustard? I mean, it's unbelievable. It's ridiculous. When you got married, the preacher said, and now you are one.

He did not pronounce you a joint venture. And you need to combine your incomes, combine your debts, for better, for worse, in sickness and in health, for richer, for poorer. Together, we're doing this. He's not your roommate. You're not his roommate. And this is, you know, we took this on. We're doing this. So you guys need to sit down together. You need one checking account, one budget, one income, and one set of debts that we're paying off,

and a set of goals that we're both trying to achieve together. And that can be babies in graduate school, and it can be getting out of debt. It can be building wealth. It can be travel. I don't care what your goals are, but you need to combine your goals, and you need to combine the process to get there, which is budget and combine your incomes to get to those goals um this is this is the precursor for divorce couples who operate this way don't stay married now today today you don't believe that but i'm telling you i've been doing this for 30 years

sometime in the next five to seven years this is this this split that you all have done inside the house is going to get formalized you're going to have a problem because you're both trying to live separate lives instead of being married it's relationally a disaster right you're pulling at each other like her roommates and um you know he's look it's not it's not your dad roommates. And, you know, it's not your dad. It's our dad. You got married. It's not his dad. It's our dad.

You got married. It's not his income. It's our income. My wife, Sharon, hasn't had a personal income in 32 years, but we have an income. We have an income. She has as much right legally, morally, spiritually, relationally to the income as I do. And you don't think she does? Try getting a divorce.

They have this thing called alimony. You don't think she's got rights to that income? She's got all kinds of rights to that income, even though she didn't personally go create it in any state. So, you know, you really, really, really, really, really. And if he won't sit down, the two of you can't work through that, then you need to sit down with your pastor, you need to sit down with a good marriage counselor and work this through. Please get on one page. Not only is it tactically and practically much easier to operate your household

when you're on one page and then one checking account, but it forces the two of you to combine your goals, your fears, your dreams. It forces you to talk about the future.. It forces you to talk about the future. It even forces you to talk about the past. It forces you to deal with these things. And as you do that, then you're going to see an increase in communication. You're going to see an increase in everything in your marriage. The quality of your marriage, you're going to see every bit of it change.

Please, please, please combine everything. Thanks for calling. Melanie is with us in Baltimore, Maryland. Hi, Melanie. How are you? Hi. How are you, Dave? Better than I deserve.

What's up? Great. I'm calling because I'm trying to get some idea of where to start, basically, with my debt and starting my Baby Step 1. So, basically, I'm 35. I just graduated last year. I work for a nonprofit. I don't make much, but I have about $30,000 in school loans. What do you do? About $12,000. I work in human resources, but I work for a nonprofit, so I only make about $38,000 in school loans. What do you do? About 12,000. I work in human resources, but I work for a non-profit, so I only make about 38,000.

This is my first job. You have a degree in human resources? Yes. Why did you choose to take less money when you're broke? Because the problem, I was looking for a job. I couldn't find a job because I didn't have any experience. Okay, so it's the best job you could get? Yes.

So far, okay. All right. Because you told me twice in 30 seconds I work for a nonprofit, I don't make much money, which you've identified that you could make more money. That's why I was asking. Yes, I believe I could. I know I could.

All right, let's go do that, too, and that's going to help a bunch of things, because you could possibly go make $58,000, right? Yeah. Now, let's go work on that, too, as a part of this discussion. Okay, and then your question is, what do you do with the student loans while you're doing all this? Yeah, because I deferred one, the $25,000 one, and the $5,000 one, I just do income-based. Mm-hmm.

Okay. But you need to get on a written budget. Because I couldn't. Yeah, get on a written budget. Do you have any other debts other than the student loan? The car that I just got four months ago because I was frustrated. How much do you owe on your frustrated car? Like $12,000.

Good gracious. This is my first car. Yeah. You were already broke and couldn't pay your student loan, so you took on a $12,000. Good gracious. This is my first car. Yeah. You were already broke and couldn't pay your student loans, so you took on a $12,000 debt. See, this has got to stop, kiddo. This has got to stop. We've got to get you out of debt, not into debt. So, yeah, you may have to take a hardship deferral.

You need to get your income up. We're going to get you on a written budget. Jump over to EveryDollar.com, download the EveryDollar app, and start living on a scorched earth lifestyle. No life. No life. No life. Get the car paid off. Get the student loans paid off.

Get your income up. And get on a written budget. EveryDollar.com. Hey, it's Blake Thompson, Senior Executive Producer for the show. You know you can listen or watch anywhere with the Dave Ramsey Show app on your smartphone. Catch the full show or watch the highlights and check out Dave's upcoming guests. Head to the App Store and download it today.