The Ramsey Show - App - You Can't Build Wealth While Buried In Payments

Episode Date: August 7, 2025

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people, build wealth, do work that they love and create actual amazing relationships. Rachel Cruz, number one, best-selling author, host of the Rachel Cruz show on the Ramsey Networks. Ramsey Personality and My Daughter, she's my co-host today. Open phones at AAA-825-5-225. Emily is in Missouri. Hi, Emily. How are you? Hi, how are you?

Better than I deserve. What's up? Okay, well, here's my situation. I started my job at 19, and I invested in the 401K that they're. company has and I married my husband when I was in my late 30s my and now I'm in my early 50s my mom wants to downsize but she I want to buy her a house so she could free up the equity in her house and be able to retire because she's in her mid 70s and my I want to do it to where I kind of I want to pull it out of my 401k and buy this but I also want

to not stir up problems with my current husband, you know, because he's financially selfish. He likes to spend the money. He doesn't. I asked if she can move in with us. He said no. I said, let's go find another house big enough for all of us. He said, no. I said, then fine, I'm going to buy a house for her.

He said no. And I really want to do this for her so she can retire with her. She could retire. I don't want her to have to work for the rest of her life. So I want to know how I can do this. If I can pull money from my 401K, put it into her trust, and then buy the house through her trust so it's protected. Because I would hate for something to happen to me

and then him kick her out of a home that I purchased for. You know how dysfunctional this sounds? It's so dysfunctional. He has so many red flags. And I can't do anything because I'm in love with his children because I don't have any children. I'm in love with his children and his grandchildren. So that's where we're at.

All right. Well, I think what you're trying to accomplish is noble. How you're trying to accomplish it is whacked. Yeah, I know. Okay. So, number one, if you pull money out of your 401k and you're in your 50s, you're going to pay a 10% penalty plus your tax rate. So it's going to be like borrowing money at $301.3.5.

percent interest, no, that would be stupid. We're not doing that. I'm not borrowing money. You wouldn't get a mortgage at 35 percent interest to buy your mom a house. That's dumb. Yeah. Okay. So you're not doing that.

That's, that's, that's, okay. Your husband's smart. That's not being selfish. It is possible that he doesn't want to, her to live with you because he doesn't like her. Yeah. Oh, that's true. That's not necessarily being selfish. It's just having good boundaries.

Yeah. I mean, I like Winston Cruz. Rachel's husband a lot, but I don't think he would let me live with them. Yeah, I would, I would let his dad live with Esther. Yeah, no, I get it. I mean, that's, that's okay. That's not, it doesn't make your husband evil. Selfish, right, right. Right off the bat. There's a possible other scenarios. And the other thing you don't want to do is you don't want to be deceptive with your spouse. That's not ever going to lead to a positive situation. right that's going to end up in that's going to end up in ashes particularly on a huge purchase

okay yeah so her home is worth what uh she could probably sell it for i don't know 280 maybe 300 and it's paid for uh no it's not she yeah what does she owe 80 000 okay so she could get a couple of hundred grand to go do something with if she downsized instead you were wanting her to invest that to live on how old is your mom 72 okay is she still working yes okay and she's taking social security probably yes not much though my dad we they own businesses my entire life and so he didn't think to pay in for her but he made sure to pay in for himself okay man emily i don't know i'm a little speechless i'm not going to lie it is well and i just I'm like, I'm just concerns for the health of obviously your marriage, but just your, just your enjoyment of life.

I'm like, you know, when you're in a situation that you feel, it sounds like you're staying in because of his kids and you love his kids, even though you could still have a relationship with them, even if this marriage, you know, didn't work. I don't want, I don't want you to divorce him, but I do want to see that part of your life. healed the proper answer the way you presented it was he said no he said no he said no that's not a proper he he doesn't even want to mow her yard he'll go and mow his 90 year old father's lawn but he won't mow hers so that's irrelevant to this discussion okay yeah i might not want to mow her yard either she might bitch at me yeah so that's true you know there may be legitimate reasons for that too so but aside from that the um he it's possible that he's looking at and saying, okay, moving in, he may have done a good job explaining why he said no, or you're not giving us that information, one of the two, but he may have said, no, I don't want her to live with us. I don't think that that's going to go well relationally. She and I don't get along very well. That's a good reason for a no. No, I don't think you ought to buy her a house coming out of your 401k. And by the way, Emily, I just told you that. Okay, I told you why, but I also told you no. And so, you know, I could be painted with the same brush after this call.

So, you know, I'm going to go back to what Rachel said. I'm going to go back to let's start solving this within the framework of a positive relationship in a marriage, a positive way to approach the relationship in the marriage. Honey, this really means a lot to me. I understand you don't want to live with us. I understand that. Okay. That's fair. Totally.

I understand you don't want me to take the money out of the 401K. And Dave explained to me that it's a huge cost. And so now I understand why you don't want to do that. But this is very important to me. And I do have some money here. And, you know, help me figure out a way to do this. And instead of like, I'm going to hide this from him and I'm going to put it in a trust where he can't do something about it later. And if you're going to do all that crap, you should be divorced.

Yeah. Well, you're just, I mean, your enemies at that point. I mean, there's nothing about you're working together. It's just, I don't know. And my question would be, too, I mean, they may not even have the money to go. Otherwise. Yeah. They may not be able to do this.

The only way you're able to is to cash out your 401K. And that's a possibility too. I mean, Sharon may want to do something. Winston may, you may want to do something. And Winston looks at you and says, no, we don't have the money. Yes. Without cashing in a 401K and getting bludgeoned. And no, I don't want Dave living with us.

Right. You know, that's okay. I mean, these are good. That's all fair. That's a little bit of what I'm like, I'm trying to discern. to help Emily because she's obviously wouldn't that called who wanted it

but I feel like everything that was said I I'm leading more to him of like yeah there's something here now granted we want to help help your parents I mean there's a level of honoring them that is wonderful

so I want to get to the root of why their relationship is so terrible right if Winston and mom had a terrible relationship you know there's something you're going to have a hard time talking Winston and giving money then yeah right so I don't know. Yeah, I would not do your plan, Emily.

I'll say that much. I didn't hear a way for you to do this. I can't help you with this. What I will tell you is, if I were in your shoes, I would work on working with your husband and finding a way to do it by him understanding this is very important to you. Hunter is in Michigan.

are you. I'm doing good. How are you, Dave? Better than I deserve. What's up? So I got some debt, and also I got specifically one debt I have a question about. When I was younger, I'm only 21 now, but when I turned 18, freshman 18, my mom kind of had me co-signed on a loan for her, for a car.

Good gracious. Why? And she got the car because she has terrible credit. You didn't have any of your 18. Yeah, I know. I didn't have no credit, and I didn't know anything about finances at all back then. But she had me co-signed on the loan, and then the car got repoed, and now the loan is on my credit as well, and I don't really know.

I don't know if I should just pay it or if I should, or if there's any other way to kind of get out of it. Wow, Hunter. That's financial abuse by your parent. I'm sorry. It's completely immoral. So do you have any information on how much the deficit amount is that they're trying to collect after the repo? It's about $10,000 is how much is left, but it's been like a year or two since it got taken, so it's spend the collections by now. So I don't really know what to do there because I know you are your damage to your credit report is going to stay there.

the only thing we can do is limit the damage by settling your portion of the deficit. Okay? Yeah. And so what it amounts to it is after you finish what I'm going to tell you to do, and it's going to take you a little bit of effort. But after you finish this, it will show that you have been repoed because you have and that you settled the deficit. So it's like a bad debt that you settled.

Right. Which is better than just a bad debt. like way better okay yeah as far as your credit bureau goes all right not that worried about your credit I don't want you doing this kind of stuff again

and hopefully you stay away from your mother when it comes to financial transactions yeah I've definitely learned my lesson yeah so do you have any contact with the company that is trying to collect the deficit they've sent me some letters

but other than that now perfect okay pull that letter out got a phone number on it call them okay We'll do. All right. Let me give you some real clear information, all right. Their job is a game.

Their job is to screw with you when you get on the phone. Okay. Your job is first you give them no information except that phone number, which you could block if you need to later, okay? Gotcha. And then you tell them the truth, okay? I was 18 years old. My mother asked me to come.

co-signed this, I had no idea I was doing it, and your company let me to be taken advantage of, I'm considering suing you. Okay. In other words, we're going to start with the offense instead of a defense. But I think I'm not going to. I think it would be cheaper if as a 21-year-old who's broke and you can't get anything from me because I don't have anything, it might be cheaper for you. for both of us if we just settled my portion of this.

You can chase her for whatever you want to chase her for, but I want to settle my portion of the $10,000. I have $1,000 I'll give you for that. Gotcha. Okay. You're probably going to be able to pull that off at about six conversations putting up with abusive, moronic individuals on the other end of the phone, and you'll probably be able to negotiate that for $2,000.

or less. My portion of this settled, remember this phrase, settled in full. And I've, A, got to have that in writing, B, you will not have electronic access to my personal checking account, I will wire you the money or send you a prepaid $1,000 debit card. Okay? Okay. Because if they have access to your checking account, their scum, they'll clean you out. They lie.

The collections business is filthy. All right. And they lie, so you have to have it in writing. An email is fine. Okay. Do not give them your Social Security number. Do not give them their place of employment. Do not give them anything that will make it easier for them to collect this debt.

And every time they start being abusive, say, okay, you have five seconds to stop that or you're going to get a dial tone. You want to hear a click? Stop that. click and just hang up on them and call them back the next day last moron i talked to over there started abuse don't try that or i'll give you the click instead let's have a conversation and you just got to have this aggressive abrasive approach um you don't have to be mean or nastier cuss them or yell at them it doesn't do any good they're going to try that with you because they know if they can get you afraid or angry you will be irrational and give them money

So their goal is to try to get your pulse rate up when they got you on the phone. You're following this? It's a game. It's a game. And you're going to be cool like you're playing a hand of Texas, hold them. Okay? Just chill. All right.

And if you feel your pulse rate going up, just hang up. Do it another day. Okay. Take two breaths. Don't drink two cups of coffee before you call them. You know what I'm saying? This is a real. You've got to play this all the way through.

So strategic. years old and you've been screwed, and I'm trying to help you walk through this, all right? Hunter, do you have money? Do you have anything saved? I don't. I just started a new job as a truck driver. I just got my CBO. I'm, like, within my first week of being by myself as a truck driver.

Good. You'll have $1,000 pretty quick, then. Yep. So you can offer them $1,000 by the end of the month. What percentage of a cosign, though, is his... Technically, it's what's called joint and servile. He's technically liable for the whole thing. Right.

That's what I was assuming. But if they think they can still get some out of her, they'll take less from him. You know, that's the point. And besides that, I kind of want to turn them loose on her for doing this. Do you have relationship with her, Hunter? Do you know where she is? Yeah, I talk to her all the time. I just don't give her money or anything like that anymore.

And there's no chance she's going to get this settled and get it off your own. That's what I'm wondering if, like, where she is in this process at all. She's broken out of control and has been for a long time. Yeah, she works. said a fast food restaurant, and she's behind on her rent and all sorts of stuff. She don't have money at all. Oh, man. I'm so sorry, Hunter.

Yeah. But I'm asking you to do something that's over your pay grade, but I think you can do it. I think you're sharp. All right. And listen, what you do, go back and listen to this episode and write this stuff down. In writing, no information, be tough, hang up, no access to your checking account. okay and that's the that's the process you deal with so you're stonewall and you're building a wall around you and then you're just throwing offers over the wall and until they pick one of them up

you just keep throwing offers well and the positive thing is that it's been in collections for what two years he said so at this point they have and if they look down and saw your age they think they've got zero probability of collecting this because statistically they do yeah statistically the Well, and he has no money right now, so the truth is, yeah, there is none. No, but I don't want him to be hassling the truck driving company, him lose his jobs because they found out where he works. Right. And they'll do that.

It's illegal, but they do it all the time. So, you know, you've got to just set up these walls. And the reason I know these people are scum in this case is because they took the co-signature of an 18-year-old for his mother who was broken and paid bills. This is how you know this company is scum. but it's probably is it that company still though it's even if it isn't they bought that paper and they know what they know what it is they know exactly what they bought they know what kind of paper they got into and so you know not all collectors are scum all credit card collectors are 100% of

them but and you know all subprime people misbehave and break federal law pretty regularly there's like a hometown collections company in your small town that's trying to collect medical bills or something they're probably okay most of them don't violate the law every day but there's the federal fair debt collections practices act that gives clear understanding what you're allowed to do not allowed to do none of that has entered into this conversation yet right but he's walking into he's walking into a haunted house and stuff's going to jump out around every corner if you're tired of living paycheck to paycheck and feeling like you can't get ahead join one of our free every dollar trainings.

There's new trainings every week this month, and they're all hosted by one of the Ramsey personalities. Either George Camel, Jade Washaw or Rachel Cruz. Rachel, when you're doing the next one? I'll have to look at my schedule. I'm only looking a day at a time right now. It's back to school week, so my mind is mush. Probably next week, though.

Yeah, I bet. It's usually like once a week or every other week. We all kind of switch off, yeah. It's about right, because there's three of you. I could have made it up, but I'm being honest. Well, it's okay. It's going to be soon. There it is.

One of you will be on there every time we do it. So they show you how to stick to a budget and find an average of $9,560 of new money, margin laying around to throw at this stuff. There's just, it's kind of like cleaning out the corners. There's stuff in there. Well, and what's great about it is the digital coaching part when with the new every dollar, which you're signing up for and going through this process, they're able to see, I mean, via the digital world, which is amazing, it's like, oh, hey, here's this, this, this, like, I mean,

list it out for you. If you'll do those five things, you've got $9,000. It's up to 16 recommendations. Like, it's incredible. And then you get to adjust it and say, okay, if I take this recommendation, how much am I willing to put, you know, how much am I really willing to do within it and all of it? And it calculates it for you and shows you your progress. I mean, it really is phenomenal. They've done a, they've done a great job. There's 16 things you can do to ratchet your way through the baby steps. I mean, seriously. Yeah, it's incredible. Now, ask us any question also during the live Q&A. Sign up for free for the free every dollar training.

It's free. Did I mention that at ramsysolutions.com slash webinar. Joy's in Pittsburgh. Hey, Joy, what's up? Hi, I'm doing good. How about you? Better than I deserve. How can we help?

That's great. I am calling because I'm a newlywed. My husband and I were married in January. However, unfortunately, recently we've been having some marital troubles. He's currently in inpatient rehab. I discovered his alcoholism back in June. And so right now I don't know when he's coming home. My biggest hope and my heart's desire is he gets his head on straight

and he does everything he needs to do. But I was curious to get your advice on how to change our philosophy for our marital finances when that time does come, that he does come home. I would normally take that perspective. I know you often advocate that what's, his is mine, which mine is his. No, you don't do it in this case. Yeah, you don't do it in this case.

Yeah, that's what I anticipate. Not for a while. Not for a while. Are you doing Al-Anon? I am, yeah. Good, okay. And so you got somebody in your corner talking to you about dealing with an addict in your home. And so what you've got to do in the overall picture, and I'm not a coach, or I'm not a Ph.D.

in counseling like Dr. John Deloney. But for 30 years, we've helped people with financial problems, and 100% of addicts have financial problems. So I've worked with a lot of it, okay? A lot, more than I've learned, more than I want to learn. So here's a couple things that people in that world say all the time. As long as he is dealing with an addiction, he's a manipulative liar. Yes, he is. Okay.

And until we get the addiction in the rear view mirror or the bulk of it in the rear view mirror, depending on your view of addictions. he can't be trusted, and so he can't handle money. I know. He doesn't get to handle any of the money, okay? But he does get the information. He does get the dignity of speaking into it. You go over it with him, you show him what you're doing.

You say, this is what our money came in, and here's what we're doing with our money. Here's the budget. He can participate in that. But he doesn't have access to the money, period. it because for his sake, because if he has no money, it's going to be harder to buy alcohol. Okay, he doesn't get any money. You're taking care of him, but you have, you know, he can see what the balances.

He can look at everything with you, help you make the decisions. And then as trust is rebuilt, then obviously he rebuilds in several areas of your lives. He can be trusted over time and trust is earned with time. There's a direct correlation. And so I came home from rehab and she doesn't trust me. She shouldn't. Okay. It was six years ago I came home from rehab and I've been dry. She should. You see the difference? And so yeah, he's been, you know, you get you get your 10 year coin, your five year coin, whatever. Then yeah, And game on. So we want to walk with him and help him, but also we want to cut off the supply.

And that means he just doesn't have access to money in the near term. But he, again, does have the full dignity as a partner in your marriage of speaking into it, having an opinion. None of that's invalid unless he's drunk. His brain still works. Okay. And so it just gets drunk sometimes. So, but if he's sober sitting at your kitchen table and y'all are looking at this and he has an opinion about what we ought to do with our money, that's valid. But as far, I'm just talking about physical access to any funds, you know, take him off the checking account.

Okay. It all goes into your name and you handle it until we get some comfort here, all right? And you guys can establish some, you can talk about it with the counselors, you can talk about it with Alon, he can talk about it with his sponsor. about it with his counselor he can talk about it with whatever follow-up he's got with rehab on when is appropriate to begin to you know let him back in and rejoin in more of a more of a healed marriage money situation that does that all sound fair yeah that completely makes sense to me particularly right now he's been in a pivot career-wise so it's even the last few months I've been the only income so that's definitely where a lot

attention had been for us in terms of that. How long did y'all date before you got married? We were dating for a couple years, but I'm pretty sure that he just, I, 90% of the drinking was when I was asleep or didn't know about it. So I, he's just really good at hiding that. Yeah, he's very closet guy. So I, I'm pretty sure I don't know a sober version of my husband because I don't know. How's he been doing, how's he been doing in rehab?

um it sounds like he's improved um there was a bunch of drama a couple weeks ago with him trying to leave um but he he ended up going back so i think now that he went back he's he it sounds like he's more focused but it's it's early to know it's you know it's yeah we'll kind of you sound very solid you sound very solid and confident in how to process this and where the boundaries go you sound pretty strong yeah we're going to do um i've talked to him with the boundaries on like We'll do marriage counseling, but it's going to be when he gets 90 days, 100 days sober, or whatever it is. Because they have a really good family programming at the rehab we're at. So they've talked through the boundaries and empowered us a lot on that side.

Yeah. Yeah, well, as strong as we are in our messaging with married couples, that you're one and you work together, you both have a say, all the things. There's always the asterisk of addiction, abuse. You know, we always have an asterisk, and this is it, Troy. this is the perfect example of it. And so there is, yeah, a higher responsibility for you to protect yourself in it, right? And if, and if sadly, you know, it doesn't come to fruition and he doesn't choose a path of sobriety and you have to make a harder call, right? You will have more of the means and ability to be able to do that too. So there is this level of protecting your current state

and then also the unknown of the future that's really, I mean, I'm assuming it's kind of left up to what he's choosing for his future, right? He's going to impact if you move forward or not, which is just so heartbreaking. I'm really sorry you're in this. And I pray for him and that healing. And I know there's some incredible facilities. And we've talked to countless people who have overcome addiction and are sober and it's beautiful. And they end up coming on the other side, even stronger.

And so that's my prayer for you guys. Two family members with a 10-year coin. not immediate family but yeah but um and real proud of them they're heroes that's a hard run i was talking to an author that wrote a book about 12 step and he said those 12 step meetings are more like church than church sometimes so it's it's powerful hey joy i tell you speaking that speaking that henry cloud has a great book that will help you all look up this and order it on amazon right now it's called trust by henry cloud how to lose it how to reestablish it and what are the steps it's really, really good. It's a great book on trust. Henry Cloud.

Today's question of the day is brought to you by Y-ReFi. If your private student loans are in default and you feel stuck, you're not out of options. Why Refi specializes in helping borrowers like you. Find real solutions with low fixed rate financing. Go to Y-refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey, not available in all states. My, or today's question comes from Susie and Michigan. My husband and I have recently become debt-free, including our house. My siblings know this and have started coaching their toddlers to call us big money. They encourage their children to say things like, hey, big money, we want to go to Disney

so you can go and pay for us? We thought it was a joke at first, but now it happens all the time. We've told them that we prefer to be called aunt and uncle, but nothing changes. For family gatherings, it's assumed that we will host the celebrations at our house with no offers to contribute. I don't mind having people over, but I feel like this behavior is disrespectful. How do we approach this? Some of my siblings are very frugal. Fragile, thank you.

I was going to say frugal, emotionally wise and blow things out of proportion. They're fragile. I wish they were frugal. I wish the other word was true, but it's not. If you're fragile and you send your kids in to say stupid things to adults, you better be expected to have your little fragile broken. Okay, we're probably going to have different approaches to the situation. Yeah.

It's not the kid's fault, but yeah, I'm probably going to sit down with sis and go, hey, your kids being a brat, stop it. Seriously. Yeah, that's going to probably be our different approach. okay Rachel what's the nice version yeah I mean I would sit down and say hey y'all I know this is funny and you know you think it's cute and all of it but also I don't want this to become a pattern of who we are in their lives and it has been and so we would love for them to stop calling us big money asking for trips all the things we just want to be aunt and uncle and okay that that would be

the conversation point with the kids and then the other things family gathers gatherings and stuff. I would, I would, I don't feel like there needs to be a conversation around that. I think you just put up your own boundaries and say, sorry, we can't host this time, you know, and you just say, it's not convenient. You just say no some of the times. And, and if not, say, okay, yes, we'll do this, but we need, um. Did you do this? Yeah. You need to bring dessert and you need to bring the meat. I need, yeah, I need to delegate some of the responsibilities. And I don't know, I think that's fine. But the whole kid thing, yeah. I mean, I would. I would not call, I would not call my niece and nephew brats to my in-laws or to my sister and Bill, her husband,

I wouldn't be like, you're, but you wouldn't either. You kind of act tough, but you would not call your. Yeah, I'm going to go, you know, they need to stop that. That's brad. I might at least say they're bratty. It's braddy. And you're teaching them this and you shouldn't, you know, yeah, I'm going to call it out. I mean, that's really ridiculous.

Yeah. And it's really not funny. Well, it's not. It's not funny. And it's the parents are being butts and what, what, what, what, what, what, what, what, what, what, what, what, what, what, what takes me off is they're sending their kids to do their, their dirty work. They want to make this point and they're too cowardly to do it themselves. So they got their little brat kid doing it. I'm serious.

That's the thing. That's just, that's parents being wusses. And it's the parents. I'm like, this is, this is not fair. Yeah. You know. And I just. it's just wrong so yeah i mean and so don't send your kids to do your dirty words you know do

if you want to say something make it make a statement but you don't have sent your four-year-old in yeah yeah yeah it's just silly and it's not funny it's passive aggressive all right will's in kentucky hey will what's up hey guys i appreciate you taking my call sure i can i help uh so basically i'm 22 years old and uh i'm doing pretty decent for myself and a couple of my really good friends are starting to get out of college. And I was wondering if it would be a good idea to allow them to move in to the next house I purchase with me without paying rent just to help them to save up for a down payment. Probably not.

Okay. I think it's okay. You're a very nice guy. I probably wouldn't do that. I don't think it's going to end well for you or them. The only way I would do it would be say something like. like, okay, here's how much the rent is, and for the first three months you get free rent. And, you know, I want you to put that towards your down payment, okay, or something like that.

But it's just you live here free, and there's no set structure to it. This could go on a really long time, and it could turn the friendship sour. Okay. So my original thoughts were to just have a set limit and basically ask for help around the house and then, like, the set timeframe of how long they could stay there. so still again, you don't think that's a good idea? I would have some money in the process because I think it's good for them,

and I don't think it keeps them from getting a house. Being a roommate is the cheapest way to live, even if you're paying for it. Okay. So for them, for them, it's still a bargain. Yeah, it'd be a deal for them just to live in the house and pay, you know, a low rent versus getting their own apartment, right? I mean, it would be cheaper to live with you,

even if they paid rent. But if you guys split the mortgage, right, by four, or something, that's probably going to end up being way cheaper than them going, getting a one bedroom somewhere. So you're kind of giving them a deal for the circumstance, if that makes sense. And if you want to, like I said, if you want to give them the first three months or something, I'd do that. But I just think it sets a tone that you're probably not going to end this well.

Okay. You know, we had a, I bought an investment property. My son moved into it when he came out of college and was one of my tenants. It was a, you know, multiple bedrooms. And so we moved some of his friends in with him that we knew. There were family friends, good guys. Matter of fact, a couple of them ended up coming to work here. And we moved them all in.

But they all paid rent. They all paid rent. And we didn't charge them, overcharge them. And we didn't, you know, it wasn't free. But they got a good deal. And, but it was just good to keep the relationship lines really, really clear. It doesn't get blurred. And you're a very generous.

a sky and I appreciate your heart on that I want you to keep that heart I don't want to destroy that that's not what's wrong with the picture what's wrong with the picture is I don't think um I mean my opinion is there's some undis unforeseen unintended consequences of straight up free that maybe you're not seeing that I think are going to go sideways on you that's what I'm that's why I'm bringing this up but I really want you to keep that heart of generosity it's pretty incredible Brad's in Arkansas hi Brad how are you I'm all right about you, Dave. Better than I deserve.

What's up? So I have a kind of unique question. I have about $40,000 in unsecured and credit card and personal loans. But my dad passed away, and before my dad passed away, he gave, I'm an only child, he gave his house to his older brother. and his older brother wants me to now take over the house but I have to take the remaining debt and pay him off because he completely paid it off from the mortgage company whenever my dad died but he now wants me to take that over sounds like you're broke yeah you're taking over a house doesn't sound like a good idea Okay, well, like I said, I didn't know if I took the equity from the house because the house is just the house itself is probably half a million dollars, but I don't even know. He's going to give you a half a million dollar house?

Well, it was my dad's. No, I'm saying it's not anymore. It's your dad's brother. Your uncle owns the house. Yes. Okay. And he's going to give you a half a million dollar house. Yes.

How much is owed on it? How much is owed on it? 90,000. Okay. Well, if you took it and put it on the market the next day and never moved into it, that's okay. Well, that's the condition is I can't, I have to take. You can't afford it, you're broke. You won't give it to me.

Would he give you this deal in 12 months if you got yourself in a position? Potentially, but he's, I mean, he's very well off financially, but I think I'd think he's trying to expedite the deal because he removed the home insurance on the house because he said he doesn't really need to add to what he owes on it. Okay, honey, you don't need to take the house over right now. You've got $40,000 in debt and no money. It's not a good deal for you today. If you can do the deal later after you get yourself cleaned up, it'll be okay.

But he's not really thinking about you. He's thinking about himself. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one bestselling author, co-host of the Smart Money Happy Hour hit on the Ramsey Networks. And my daughter, she's my co-host today. phone number here is triple eight eight two five five michael is in phoenix hi michael welcome to the ramsie show how are you doing today sir better than i deserve how can i help uh wonderful i have a gentleman

in my church um about a year ago he co-signed for a car uh for a friend of his uh girlfriend and i didn't know about it but two weeks ago he came to me because they um asked him because they were behind on their rent to take out a cash loan on the car at a cash one place. And so he gave them that cash. And they're not paying on it. And so it's coming out of his account. And so just trying to figure out the best way I've helped him to break off contact with them because they were using him, obviously.

But I just don't know the best way to get him out and away from them with the co-signing of the loan, whether to get it repoed or, Just let it go dormant. I don't know how to break up that relationship. How did, how come he's not able to emotionally handle that? He's special needs. Oh. So they're taking advantage of him.

Oh, my gosh. Wow. That's horrible. Now, are they, did you say they are, he's in your church, did you say they are too? No, they are not. I didn't know about this. He's been attending for almost a year. I see.

but I didn't know about this until two weeks ago until they started to try and get cash from him. Yeah. Wow. How does he know them? What's the relationship with him? He met the guy like three years ago and everything was fine.

I believe he's also a little bit autistic. And so they were good friends, but a year ago, the gentleman got married. And when he did that, the girlfriend asked if he could co-sign for a car because I don't know the whole situation in there, but he did. And so he co-signed for her car.

And, and then. For the friend's wife's car, not his wife. Yes. Okay. Yes. All right. So, oh, my. These guys are, well, yeah.

So there's about 16. Is there anyone else? Oh, it's the guy you're trying to help. Is there anyone else in his life? There's parents, but I don't know. He doesn't really, he hasn't told them. I told him to tell them. Yeah.

but he doesn't want to tell them to worry them. Yeah, no, he's ashamed. That's not worried about worrying him a bit. Yeah, somehow the biggest thing that you can do is to stop the bleeding, so to speak, and make sure this content and make him promise you that he won't do anything else with them without first talking to you. He did, yeah. Yeah, and then hold him to that.

I mean, you need to circle back on that periodically because he may not. Well, we're actually, because they're trying to come after him, and we actually are working on getting a police injunction so that they can't be around him. Yeah, a restraining order. Exactly, because if they hang around him, it will happen again because he's a nice guy. Yeah. So. Well, okay.

He just doesn't have the capacity to say no, yeah. That's different than being nice. Right. The, all right, and so he's got a co-signature on this car. And is the car being paid, or do we know? I spoke with the girlfriend, and she said, if I did not allow them to continue communicating with him and him to give them more money, they would quit paying on it.

They've already quit paying on the, they did not make the first payment on the cash loan that they had said that they were going to pay off for him, and so that came out of his account. And so he's struggling financially with that. He's got to shut his account. He needs to shut his account down, so nothing else can come out of it.

Okay. shut his account down um do uh is you keep saying girlfriend is it is not it's the girlfriend of the friend yeah but the friend got married i thought he said i'm sorry i'm not 100% sure i think i think it's his wife but it might be his girlfriend i'm not sure there's a couple of con artists on the other side of this equation yeah um so we're putting a restraining order in place and you're going to shut down his account um the only other thing i think i might do is uh if you have an attorney in the church that will help pro bono. I think I would go to both of these companies, the cash company and the car loan company,

and say this guy is of diminished capacity. And you had him sign something. He's not legally bound to it. And you need to release him. Or I'm going to make you the poster child of people who abuse special needs people. And let the attorney get him off of these two loans. And then I don't care if the car gets repowed. the cash is gone he's not going to be able to do anything about that and he needs to set up his account where they can't get into it anymore but the attorney needs to get in touch with both of them say listen this guy goes to church with us he's diminished capacity doesn't have the ability to sign this stuff he can't be held legally liable and if you guys don't let him lose I'm going to make you wish I would let you lose that's the attorney's right that's the attorney's script okay and pretty simple because people that bottom feed on stuff like

like this, they're generally pretty cowardly if someone knowledgeable comes at them. Is he severely autistic, Michael? No. Okay. I'm just wondering how easy it is to get. Yeah. Emotionally. Sure, sure.

But I just wonder how hard it is legally to get that. It doesn't matter. I'm not doing it. I'm just threatening it. Okay. We're not going to go to court. We're not going to go to court and have him to call. declared incompetent over a couple of little baby loans.

We're not bothering with that, but we are going to let these guys know that they are morally bankrupt, ethically bankrupt, and we're going to make them wish they hadn't done this if they don't let this guy go. Yeah. So this is called a threat. Right. Yeah. So worst case scenario.

Just ignore it. Just ignore it. And if it screws up his credit, good. He can't do it again. Right. Right. So just don't make any payments on it. No.

Let it all implode. And by the way, if the repo man ever gets in touch, you know, it's not. That's the way they'd tell them where the car is. Tell them to go get it. Right, exactly. I'll give you the address. I sure hope you don't go to 1, 2, 3, 4, Main Street. That's where the car is.

I sure hope you don't go over there. Right. Okay. Please don't go to this city. And then you don't go to that address. Right. I don't think I know where it is, but the last time I saw it is over there, I sure hope you don't find it. Yeah, right.

Right. It was there at 10 o'clock this morning. Here's a picture. How much is it all, Michael, total? With both loans, with the, with the cosign of the car and the amount of cash that they got. Like, what did it all total? There's still 16, just under 16,000 on the car. Okay.

And then $2,000 in cash. The car has a value, though, so that's not going to be the deficit after the repo. The bad news is this guy's got his credit dinged up. The good news is he won't be able to do it again because his credit's dinged up. Right. So it's going to end up. He won't be able to co-sign. Yeah, it'll work out to his favor, I hope.

And hopefully we can start to, you're being, you're very kind, Michael, helping. To be disciplining him and helping him through this, number one, but also giving him some tools for discernment that are not readily available to him. And if you can help him with that, it'll also help him to build boundaries. Hey, you know, even all of us that are not special needs, we need those tools. And sometimes we have to build those tools. So that's not that unusual. Did you know that twice, that two-thirds of Americans die without a will? Like seven out of ten.

When you die without a will, you're inviting the court, the lawyers, and the public into the most personal part of your life, and they're going to tell you what to do. Well, they're going to tell your family what to do. You'll be dead. But you need a well. Billionaire industrialist Howard Hughes. known as one of the richest men in the world died in April of 1976. His estate with no will wasn't settled until 1983.

600 people claimed rights to it. 22 legal cousins finally split up the fortune. It destroyed the whole thing because he didn't have a will. You need a will. Even if you don't have billions of dollars. Even if you don't have 2.5 billion, you need a will. If you just have kids, don't let the state tell you. you where your kids go you know make sure you name the guardian you have a will and you've set up

you know all this so it's uh we want to challenge you to create your will in august in less than five minutes you can find out if an online will works or if you need a full-on attorney to do it ramsysolutions dot com slash will quiz it's free click the link in the show notes and we'll get you set up this is will month use the promo code and uh you can get an online will and get 25% off by doing that and all this but go check out the will quiz real quick and you need one by the way if you're breathing and you're over 18 jeffson buffalo new york hi jeff how are you great thanks for having me on the show sure how can we help uh so my daughters just graduated from college we took some loans um to get them through um we've got about 180 left on our mortgage and i have three retirees

accounts plus a brokerage account and the brokerage account has about 200,000 in it and my wife and I are talking about should we just cash in the brokerage account, pay off the student loans and take the rest of it and pay it against the mortgage. How much student loan debt is? Pardon me? How much student loan debt is for? It's about 125. Between how many kids?

Just one? Two. Two. And these are like parent, are these parent plus loans? loans or are you yeah oh okay so you've got student loan debt with 200k in the bank yeah pay that off by knife fall for sure are you yeah by the by the time you get off the phone it should be paid okay right now yeah absolutely you're you and your wife are right I would do what you suggested instantaneously and then I would make sure do you have

any other accounts that are non-retirement um no we have the broker's account and then we have our savings account. The savings, how much is in the savings account? Oh, the savings account is the $200. No, the brokerage is $200. How much is in the savings account? The savings account is the $200. The savings account, it's about $5,000 or $6,000.

Okay. You need three to six months of expense. Do you have any loans other than the student loans? Not counting your mortgage? No. We have no credit card debt. We have no car loans. Okay.

All right. So, Jeff, I'm walking through the system that we teach. that we've taught for 30 years that works every time. It's called the Baby Steps. The first step is to be debt-free other than your home. So $125,000 in student loans that leaves $75,000 in the brokerage account. Okay? Now you're debt-free.

That's Baby Step 2. Baby Step 3 is a fully funded emergency fund, which represents three to six months of household expenses. What's your household income, sir? It's about $180. Cool. What do you think your monthly expenses? expenses if you just had to write checks and be and stay open what would it take to stay open uh we're

cash positive i i have a budget and we keep track of that every month so what's it take a month i've thought yeah how much is it take to pay mortgage what's it take to stay open each month what's your burn rate oh it's about five and a half it's actually 50 600 okay so three to six months of that would be 2025 thousand dollars yep okay so uh with a 180 income that's probably pretty cool so let's call if we call your emergency fund 25,000 it's only got five in it you need to put 20 in it now we've used another 20 of your 200 so we're down to 55 we're down to 55 that you're going to throw at the mortgage baby step three is putting 15 or four is putting 15 percent of your income into retirement if you're not start putting that in the

budget and the baby step number four is kids college oh wait we just finished that baby step six is pay off the house as fast as you can and that's the 55 going to towards the 180, and then whatever I can squeeze out of my budget going forward because you're cash positive instead of building up a brokerage account and paying off the mortgage as fast as I can. Okay. That's how we execute this. While funding 15% of your income into retirement.

So you are still investing while paying off the house. Okay. Now, that's the outline of what we do. I'll send you a copy of the book The Total Money Makeover because you sound like you're open to actually doing it. That's pretty cool. So it'll show you how to do it. That's very cool.

And the purpose of all that, Jeff, is what it does, it sets you up with no mortgage payment, making $180, no payments of any kind, your emergency funds covered, you're systematically investing. There's nothing left to do then but become very wealthy and outrageously generous. And we call all of that living like no one else so that later you can live and give like no one else. You've done a really good job. All we're doing is tweaking the flow of some of this cash and maximizing its potential. that's all we did in the last few minutes so very cool yeah student loans are gone boom $25,000 emergency fund boom 55 on the house or 20 25 but adding 20 to the emergency fund 55 on the house so now the house is down to 100 and a quarter and here we go game on baby

game on and you'll knock that out you'll probably knock that out in a year man and you walk through the backyard without your shoes on the grass feels different man when you got no mortgage life changes. It's so freaking weird. Jeremy's in Atlanta. Hi, Jeremy. How are you? Better than I deserve. Good. How can I help? I've kind of accrued a lump sum of money over the years and savings, and I've kind of put it into high-yield savings, maybe bought a few CDs and stuff like that. But I don't have any retirement, but everything that I own is paid for. Good. And I don't really know what percentage to go. So you're great at avoiding debt, you're great at saving, you're lousy at investing. Yes. Scared, honestly. That's fair. Well, you know what? Scared when you don't

know how to do something is wisdom. You know, you get behind a car and you're 12 years old and they start the car and it's 400, 400 horsepower. You should be scared. Well, I know money in my bank account's good. It kind of scares me. Yeah, yeah. How old are you, Jeremy? Control. I'm 38. Okay. So here's the thing. There's two kinds of fear, and yours is a wise fear, and unwise fear is, I just have this general paranoia, and we call that false evidence appearing real. But your fear is, I don't know what this is, and it's powerful, and so it's scary. That's a good fear.

So how do we overcome that? We add knowledge to the equation. So if I woke up in your shoes, how much have you gotten all these accounts, by the way? Um, as of right now, about $483,000? Way to go, man. Well done. Way to go. Most people are broke.

And look at you. That's so good. I started out very, very broke. Yeah. It's going to be so easy for you, though. All you've got to have is some knowledge. So do you own a home? Yes.

Okay. The home did not come with a FDIC guarantee that it would not go down in value, did it? No. But you were very comfortable buying that. You weren't scared. investing in that piece of real estate and I'm making that point I knew it was going to be working more ah historical data walking around since you're old enough that you've seen houses go up in value and you could believe they're going to continue to good analysis

and that removed the fear so I'll give you an example I own a mutual fund that started in 1934. It has averaged almost 12% of years since 1934. It's only had 22 down years. And in the last 25 years, it's only had three down years. I'm pretty comfortable with that, like you're pretty comfortable buying a house. Follow me? But you got to add that knowledge to your bucket.

So what I would tell you to do is sit down with a Ramsey SmartVestor Pro and click on Ramsey Solutions.com, sit down with them, and they have the heart of a teacher. Tell them when you call them, I'm not ready to invest. I want to learn because I'm scared. And they will be gentle, kind, and teach. And they will teach you and teach you and teach you until you are ready to purchase,

not when they're ready to sell. And then you'll be able to do some long-term investing, the same way you bought that house. Maddie is in Orange County, California. Hi, Maddie. How are you? Hi, good. Thank you for taking my call.

Sure. What's up? So my husband and I are in Baby Step 2. We have about $100,000 in debt. And our question is, do we continue to pay off our minimum payments on all of our debts while we're trying to hack off our debt? Or do we pause on our minimum payments? payments and use all of that money to knock out one debt at a time. No, you make minimum payments, pay minimum payments on everything, but the little one

and attack the little one of what you can find beyond that. That does two things. One is it keeps them from chasing you and hassling you for being in default, and two is it keeps from destroying your credit. Okay. Yeah, just to stay current, so you guys don't get behind on them if you just stopped paying them. Yeah, which we're able to pay all of them right now.

just thinking, you know, if the thought process is, you know, that we don't need a credit score, then... Yeah, you don't, but you're going to get yourself into a bunch of late fees and maybe even some legal fees where they come after you. Yeah. What's all the debt in? What are the different types of debt? So we have 12,000 in student loans, 70,000 in car debt, which I just convinced my husband to sell the cars. That's great. We're not there.

20,000 in credit card debt, 10,000 in personal debt, and then 35 in medical debt. Okay, good for you. Well, you're attacking this, and what's your household income? My husband makes $120 a year. Okay. All right. And, yeah, you get rid of the cars. It's going to catapult you way forward in this and get, you know, just get some inexpensive cars for the time being,

and which don't fit in in Orange County. I understand whoopty dopty, but we're still going to do it anyway. Was it just lifestyle creep, Maddie, all the credit card debt and everything? I'm sorry? Was it pretty much lifestyle creep, would you say all the credit card debt? Or were you guys opening a business or what was causing all that? No, it's just not wise spending. Yeah, it's normal.

My husband had a lot of credit card debt before we got married, and so most of it is. Gotcha, gotcha. And you're both on this now, and you're both attacking it. And we're talking about this a lot. And that's why you start asking questions like this. Good, good. That's a good sign. I think you're on track. But no, the answer to your question is I would continue to pay minimum payments because of the late fees, the legal fees, all the other stuff. And yeah, I'm not worried about your credit. I'm not trying to build credit. But on the other hand, I'm trying to destroy it either. we'll let it be what it is and pay everything on time, be current, and then attack the smallest. But getting, I mean, you've probably got, what, $1,400, and car payments, right?

Yeah, we have $12,000 in car payments, and then we have a little over $1,400 in, I'm sorry, $1,200 in car payments and $1,400 in other minimum payments. Yeah, so half of your payments are car payments, and 70% of your debt is. So you don't only have $30,000 left to hit. Which is so great too, Maddie, because on the other end, always, the math, you think you guys don't have $3,000 a month freed up, right? That's not going to banks and your student loan debt and everything. It's going to be with you guys. So that's always the encouraging other end of the formula.

Yeah, look at how fun this is going to be off the back once you do all this crap that you've got to go through to clean up the mess. But Rachel's got a good point there. Tanya's in Arkansas. Hey, Tanya, welcome to the Ramsey Show. Hello. Hi. Hi.

How can we help? I have a son who graduated high school this year, and he's going to an expensive Christian college, and he doesn't quite have enough money to cover it. And I'm wondering if I should be generous and help him out until he can get a job and get settled, or if I should say, sorry, bud, you're on your own. how much is the how much is this college costing per semester per year um let's see he he lacks about i think it's about seven thousand dollars um per semester um the college itself was like 50 000 and he's gotten enough scholarships and stuff to cover most of it but there's just a little

bit wacky. The number one thing that causes student loan debt is not the fact that people want to get an education. It's the fact that they select a college they can't afford while there's colleges all over the place he could have afforded. Right. And he had said that after this first semester, if before getting a loan that he would come back to our town.

How's he going to pay for it? He's short. Well, I was going to help him. No, no, no, no, no. I mean, his plan is if after the first semester I have to get a loan, well, he's going to have to get alone. He's guys short. What's his plan?

Oh, I'm back here to Conway to go to a state school, which would be, it would be covered. No, he's already gone to the other place for a semester and couldn't afford it. How did he pay for that? Oh, I am. I was going to help him with this first semester. Oh, so he knows that. You've already made that commitment. And then going forward, he's going to try to work.

Okay, so if he's $7,000 short, mom's going to cover it, but he's going to come home. What? Well, he has had, well, let me see, he's gotten a 529. He had about, let me think how much he has. He has $4,000 in it. It's not very much. And it doesn't completely cover this the first semester. So he was just going to go ahead and just use that and then go forward with what he's got.

And I said, well, I'd like to help you. I'll do this much. Tony, if you don't pay for the school, you don't get to go. And he's short. So unless you give him the money, he's going to take a loan. And what he's about to pay for one semester at this school probably could cover him two years. He could have gone through the whole thing in Arkansas. Right.

Right. so the best gift you can give him tanya honestly is sitting him down and laying out the facts of the situation and the reality of what she's living in and make a wiser choice is he starting this fall like coming up yeah he's already set to go and and pay for things this fall yeah cancel it i mean seriously stupid it is stupid because i'll be honest it is probably i'm i'm gonna just say it It's probably a school that no one's ever really heard of. It's going to do nothing for him in the job market, right? Like, there's nothing that is causing any, any type of going into the market place.

But the idea that somehow all the holy people go there and they don't go to the others is hogwash. Some of the people at Christian schools ain't real Christian, honey. We all know that, okay? And that may not have been. I mean, it's just, it is, it's, there's no marketplace value for most of the, these degrees because the school doesn't carry any level of credibility because the majority of people don't even know where you could get a to get a degree at another college that no one's really ever heard of either but it's an in-state but it's an in-state school

and you take in-state tuition and he gets it paid for because he sounds smart for what he's paying for this semester he'd probably go all the way through Arkansas yeah he should he should cancel so that's the gift you could give him he should cancer honestly to to lay this out for him so um let me let me uh how do i say this gently um your job as mom is not to go along with someone's dream which is actually a nightmare in the making your job as mom is to be stronger than that and speak more directly into this with more wisdom and more force i would beg you to be stronger with him he is not equipped to make this decision and we can tell because he's made a bad one.

And he is not, just because he's tall and taller than he was, and his voice is deep and he has some hair on his back doesn't mean he makes good decisions, okay? Just because he looks like a man doesn't mean he's ready to make this decision. So he needs, he needs his parent in his life to say, don't do this. Yes, Tanya, please, please, be a voice, be a voice over. Yes, she will. Please do it. You can do it.

Yes. You can do it. I hope you do. And that's what's so hard about student loan debt. It's these 18-year-olds that have no idea. He's going to a $50,000 a year school, right? Do you know what I mean? And there's no one told him this is a dumb idea.

This is a stupid idea. Oh, man. Tanya, you can do this. This is how we have $1.7 trillion in student loan, ladies and gentlemen. You give free money. And not to Harvard. You know what I mean? Like a big school.

It's probably, I mean, it's doing nothing. It's going to do nothing. Who would go there now? I'm just saying a school that people actually have heard of. It's like, wow, that's impressive. Dale, I don't know. Brett's in Lincoln, Nebraska. Hi, Brett.

How are you? Good. How are you doing today? Better than I deserve. What's up? Well, thanks for taking my call. First off. Sure.

My wife and I have a little over $100,000 in credit card debt. Wow. And I'm in sales and have a quite large commission that's coming in at the end of this month that will basically wipe out all that debt, praise God. Wow. That's lucky. I mean, you worked hard for it. I know, but that's great.

Yeah. And then you're panicked that you might do it again. Right. Good. I hope you are. How do we, yeah, my wife and I are both on the same page and that. So obviously a change in our spending habits and lifestyle, but I'm curious how we should be thinking about our behavior and our spending when it comes to not using a credit card and using more cash or a debit card and how we should approach that. Light two candles tonight after dinner, get all the credit cards out and have a plastic surgery party, a placectomy.

Sounds good. Chop every single one of them up and then close. close every one of the accounts when you pay them off. That's step one. Yeah, cut it off at the source. Just be done. Be done with it. Do you guys know the why? Why, what caused the $100,000? Is it purely lifestyle? Is it that you guys just didn't have a budget? Like, what was the, because getting to the root of it and understanding the motivation and what caused it in the first place is going to help going forward. If you can identify that. Yeah, I think it's a combination of both, right? Like we had a budget, but we didn't really stick to it necessarily

and monitor it on a weekly basis. And there were also some life style choices and trying to keep up what the Jones is and just wanting nicer things above and beyond our paycheck. Both of you can look at each other and say that in total. Both of you are admitting this, right? Yeah. Okay. Yep, absolutely. Good, good. How old are you guys? 37 and 39 perfect and what's your household income including your normal checks that you get um so it's variable depending upon the commissions every year sure but i mean what do you average what's your normal income my annual paycheck is 125 000 myself um my wife works part time at our church and makes about 23 000 then how much do you usually do you usually

get in these bonuses. I know this is an unusually large one. Yeah, I mean, it's variable anywhere collectively between, I'd say, like, 300,000 to 600,000 depending upon the year. Oh, wow. All right. So here's what I tried to do for a long time. I was a little younger than you at the time when I figured it out about me was I'm an abundance person and I'm I'm a really good salesperson. You're obviously a really good salesperson. And I'm an abundance person. When I put those two things together, what I fell prey to was I always just thought, well, if we need some money, I'll just go get some more money.

And in other words, I thought I could out earn my disorganization and stupidity and overspending. And it found out I couldn't. You can never make enough to beat that. And that's where you are today. You've discovered that. I don't know if you fell prey to that exact emotion or not, but I always thought, I'll just go get some more money. I can out-earn my stupidity. And sometimes someone that's very good at what you, like you, it's like I am, they fall prey to that.

So you can't. You have to build processes and systems into your life that causes both of you to be accountable. And that starts with a basic budget. Yeah. I mean, I'm going to be honest with you, Brad. I'm a little bit shell-shocked that I'm like, you guys went $100,000 in debt making half a million dollars a year. Like, I mean, that's pretty.

That's a lot of spending. That's a lot of spending. Like, that's a lot of spending. And I like to spend. But I'm like, oh, my gosh. So, I mean, if I, yeah, if I were you guys, man, I mean, I would sit down and figure out, how can we, I mean, I would drive such deep contentment and discipline so hard in this first year and make it.

swing the pendulum the other way. Yes, make it a year goal and live on, God forbid, 200,000. You know what you mean? Like, seriously. Just to get to this idea of reality of like, okay, we are good, right? Like we make great income. And if we choose 250 or whatever. And you're in Lincoln, Nebraska, not Manhattan. But honestly, to know that you, your wife, your marriage, your family, your friends, your life is good. Like, you don't need all this stuff. And I know you feel that already, but there's something about actually living it out and making choices and being disciplined to know

we have money in the bank but we're still choosing to live so below our means to really get in this process and this pattern and this and actually live it out and then you guys can start kind of loosening the reins more and more but I mean that's what I would do

if I were you guys and I'm a spender but I would I would yeah I would try to live on half the income and just be disciplined in that because you guys have been so far the other way I hope y'all took great vacations and stuff you know what I mean like I hope there's like there's a tremendous gun collection yeah or tremendous purse collection I don't know but but good for you guys I mean you're obviously you're an incredible worker I mean that's yeah that's a phenomenal income

which is so great and you guys can use that in such wisdom and discipline and contentment and here's the thing you will like yourself better and each other better when you do that yes yes because you're more likable than some out of control spending freak it's going to feel really good yeah it's going to it's in a spiritual to discipline in it all like it's overall i think it's going to be really really healthy for you guys so i'm i'm excited for you honestly because it's it's the kind of people like you honestly brett that you can bless your family you can do some really amazing things in life because you have the tools to do it and you're going to be able to be extremely generous and the blessings you're going to be able to give to people above and beyond is um is incredible

incredible. And then you think about your kids, kids, and the legacy. I mean, you guys are just set up to have a really rich, not in numbers wise, but just fulfillment. And money can be a tool to help create that. But it is not the thing that's going to be the fulfilling factor. And you guys know this because it doesn't buy happiness. You don't, you're never going to find a level of satisfaction because you will keep spending and keep spending and spend beyond a $500,000 a year. Yeah, there's a piece underlying this. She's talking about godliness with content. Tentment is great gain, scripture says. And so it's that piece that, and when you're overspending,

it's kind of frenetic and kind of crazy and kind of wild. And there's this adrenaline rush and this dopamine hit from hitting the submit button on the cart on Amazon and all that garbage. And those people, they, the people that do the marketing on that stuff understand that and take advantage of it. And so your anxiety level in the house is going to drop when you get control of this. Your relationships are going to improve when you get control of this. You're probably going to experience physically feeling more peaceful when you get the control of this. So there's so much more to it than the simple arithmetic or the sickening sense of I'm out of control and overspending

like some kind of freaking addict or something. And so, yeah, you're really asking great questions you're in a great place and the phenomenal news is you get one shot here to clean it all up at once wow chop up those cards tonight get a debit card uh you can go on the envelope system i still carry cash in my pocket and i'm i buy most things with cash but i'm really old school i mean i've got a redneck emergency found in my wallet a thousand thousand bucks right all the time just um just because i might need it and i never do but just because i might need it and so yeah it just there's a different feeling when you're using money that you have and it's a sense of power a sense of control over it telling your money what to do

instead of wondering where it went we're going to sign you up for the every dollar premium and get you involved in that and jump into one of these free webinars the ramsie personality like rachel are doing showing you how to set that thing up and get it running it'll be valuable you and your wife sit there and do it together and lay out every dollar before the month begins, where it's going to go, regardless of how big the commission check is, every dollar needs a name. I don't care where it's going as long as you do it on purpose. Actually, I do care where it's going, but do it on purpose. And that'll get you there, and you'll see some real good movement in that. How, big numbers. Yeah, I know,

which I'm glad because they can get out of it, but also it magnifies. It magnifies the absurdity. Of what it is. Yeah, and that's a great example. But Brett, we're cheering. you guys on. Amen. I'm proud of you. Get after it, dude. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Rachel Cruz, number one bestselling author, Ramsey personality, host of the Rachel Cruz show. My daughter is my co-host today. Owen is with us in Canada. Hi, Owen. How are you? Better than I deserve. How are you guys?

Just the same. How can I help? So I'm wondering if I should sell my home and rent for a little while and then like save up some more just to make it a little more affordable on the month to month on my end. Okay. What's not affordable? Well, after I started listening to you guys, I realized, like, my mortgage payment is over 25% of my monthly take home. What percentage is it? It's probably about, like, well, 25% would be $850, and it's currently $1,250.

Okay. All right. And how much other debt do you have, huh? None. Okay. What's your household income? I clear 3,400 a month. Mm-hmm.

Okay, so. And then my, my expense. I don't know Canadian tax rates off the top of my head. I'm guessing you make, what, $60,000 a year? Yeah, yeah, that sounds right, yeah. Okay. All right. And, um.

You bring home $3,400, though. Right. Yeah, that's right. That's like, that's like every, yeah, clear. Yeah, and you don't have any other debt in your house. So I'm, the last, the reason I'm hedging around and fumbling is the last thing I sell is the house. And I will sell the house if you can't afford it. I would tell you to do that because it's not a blessing to you.

Yours is a little high, but it's borderline. And do you hate the house? I don't hate the house. I just, when I heard you guys say that a house should be a blessing, you know, not more, an inconvenience. Yeah. It feels like an inconvenience from time to time. Okay. It feels like it owns you sometimes.

You don't own it. Yeah. Yeah. What's the trajectory on your income? Is it going up fast? It goes up a little bit year by year. Slow. Okay.

Yeah, slow, yeah. Is it just you, Owen, or are you married kids? Just me. Just you? Okay. I'm okay if you want to hang out. there and hang on to this thing and fight on through it it's not enough that it's um that it's completely holding you back it's not enough that you're drowning in it it's it is enough that

it's uncomfortable and it is more than i would sign you up for if we were talking from scratch but selling a home moving all of that is a very emotionally and financially expensive thing to do and so it's the last thing i tell people to do before i tell them sell the car real quick I tell them to sell, you know, other stuff so fast. I tell them taking extra job so fast, that kind of thing. And, you know, if you picked up some side hustle to add to the equation, it probably would lighten this load a little bit. Yeah, because it's a couple hundred bucks, you know what I mean,

six, seven hundred bucks a month that ideally, you know, you would have for margin in your budget. But, yeah, I'm with you. Rachel's in Sacramento. Hi, Rachel. Hello. How can we help? You know what?

I made a big mistake. Oh, oh. The daughter, a car. Yes. I've made many, but this is huge. Last September, and it was contingent upon her getting herself together, her FICO high, all that good stuff, and then putting it in her name. It's almost a year she hasn't done that.

She's getting fast-track tickets. That's like a toll bridge thing, and her insurance is not covered by anyone other than mom, and I'm becoming inundated with this, and I feel like I'm ready to do something drastic just to pay off the car and just give it to her. How much is the car? $27,000 approximately. Is it in your name, Rachel? Yes, ma'am.

It is. And the loans in your name, everything. Yes, ma'am. Dummy me, yes. So let me ask you. The agreement was that she was to arrange to get the car paid off and put it into her name, and she's done, been unable to do that because of her irresponsibility.

Is that what you told me? Absolutely, pretty much. And how long ago, and that was a year ago? Yes. And things have gotten a little bit haywire now because these tickets have come. Yeah. Registration is going to be more than expected. Yeah.

And, you know, I would just call her and have her, she lives in your area, I assume. Yes. Yeah, I think you need to sit down with her for a cup of coffee and say, honey, you know what, I love you. And I'm so sorry. I thought I was doing something nice for you, and this is a curse to you. It has really messed up your life, and I'm so sorry. Hey, we're going to fix it. We're going to sell that car.

Well, she has three children, my grand. I don't care. I don't care. I don't care. She does not need a $27,000 car, and she's irresponsible, and she didn't follow through on what she said. Are you a multimillionaire? Absolutely not. I'm going to start working for you guys and become a window.

So how about that? That's another story. Okay. But you don't have the money. You don't have the money to throw around $27,000, do you? No, but you know what? This is the crux of the question. I am 61.

I'm going to get my Social Security early next year, even though that may not be the smartest thing to do. But I have a home. So I was either going to get a HELOC or take the lump sum from my employer, just be done with your own. Sweet girl, you made a mistake. Undo the mistake. I did.

Don't keep going it. I know What you did was not a blessing to your daughter To the grandchildren You didn't help your daughter You hurt your daughter You put her in a situation where she can't afford a car Well actually when I went to the

Honey she can't afford the car No she can't She can't afford the tickets and the registration You can't afford the car You can't afford the car Nobody can afford the car The car needs to go away It's not a blessing

She's going to transport the children Honey, we might get a $5,000 car Yeah, she's a single parent Honey, she can get a $5,000 car Single parents do it all the time But you're not blessing her You're not blessing those kids You're putting those kids' mom in a trap

And she can't swim She's drowning because of you Stop it Stop it Quit rationalizing it It was a dumb butt idea quit doing it stop it love your daughter better

okay sit down with you say i made a mistake honey we're selling this car and we're going to figure out way to get you a little five thousand dollar car to cart those little kids around and get yourself up on your feet kiddo because guess what that's what you did right you did the same thing and nobody gave you a car you couldn't afford to drown you in it

you're like somebody swimming and you hand them an anchor How do I sell a car that's being finding? You sell, okay, now we're getting somewhere. Yeah, go on Kelly Blue Book, Rachel, okay, and put in all the information and see how much the car is worth. You owe 27. There's a good chance you're going to be underwater on this car. So the value of the car, let's pretend it's at $24,000, that you can sell it for $24,000. That means you have, you're going to, you have $3,000 that you have to find.

So what you could do is go down, get a $8,000. $8,000 loan from a credit union. Give your daughter the $5,000 if you want to get her the $5,000 car, $3,000 for the difference and be done with it. And you pay off the $8,000 for your mistake. And then you pay off the $8,000 of that loan. But here's the thing. When you're trying to bless somebody and you do it wrong, you don't bless them, you curse them. And that's what you did. You didn't mean to, honey, but it's what you did. So you need to undo it. Thanks for joining us, America. Buying or selling real estate is a big deal in the middle of all the drama that we've got going on right now. And when you're facing drama, Dr. John Deloney is a good saying. He says, facts are your friends. Facts can help you pierce through all the hyperbole and the overstatement and the crazy stuff you see on TikTok and on Instagram. Facts are good for you.

If you want to know what the latest facts are about the U.S. housing market trends, we can help you do that. Go to ramsysolutions.com slash market. You'll be able to find there what the median house prices actually are and what they're trending up or down, regardless of what someone told you that their neighbors sold their house for. Yeah, that's not good information. How many houses are actually on the market?

What are the real interest rates today? We keep the website up to date, and ramsysolutions.com slash market or click the link in the show notes. Malik is with us in Boston. Hi, Malik. How are you? Hi, I'm doing well. How are you guys?

Better than we deserve. What's up? Awesome. Thanks for taking my call today. So I make kind of a variable amount of money each month and trying to budget right now to kind of more aggressively pay off my student loans and just wanted some advice on that. what is the the fluctuation usually like what's a high month low month yeah so last year I made um about 65,000 and that was anywhere between like 2,500 a month to like upwards of 9,000 okay

pretty good fluctuation what do you do for a living yeah um I'm an acupuncturist um so I a lot of my income I mean essentially my entire income is based on the number of people I see in a given week or month, and then I also do some side jobs as well to supplement that. Okay. So what I would do, because I'm on a, my income is up and down to throughout the year, depending on work and everything too, highly commission-based.

So what Winston and I do, in our budget, we have it prioritized of what has to be paid, and then what we just like and enjoy. And so for you, you've got to figure out, you know, food, shelter, utilities, transportation, your four walls have to be covered every single month, right? We're not going to get behind on those things. And what does it take to do that? If it takes $2,100 to do that, the first $2,100 is gone before we even start talking. Yep.

And then everything else after that prioritize different categories. So insurance would be one thing, you know, to make sure that that's paid. But just go down the list. And if you download our every dollar app, they give you a set number of categories. It's like up to 20 of different things that you probably spend money on throughout the month that you may even not realize. And so I, so we just prioritize that. And then when the money comes in and we realize, okay, we have enough, you know, obviously to pay the essentials. And then anything extra then starts dropping into these other categories.

And then what I would do too for you as you are starting all of this is to have a, we call it the peaks and valleys funds. So have a separate kind of savings account or savings lines. within your savings to put some extra money aside so when you do have a low month you can pull from that to create somewhat of a consistent lifestyle if that makes sense to even it out a little bit yep and then anything above and beyond that because you do have debt your expenses should be at a minimum so you're going to be throwing anything extra you have at this debt to get it paid off so a big month equals big debt payments a small month equals we lived and maybe paid some on the debt right okay yeah that that essentially it was kind of like okay I figured out how much

my basic right like requires and then um however much on top of that I need to be able to like keep some in order like in case I have a low month that's right that's right yeah just figuring out how much of that to put towards not as much as your emotions feel like it won't take much with what you're describing if you had a thousand two thousand dollars sitting over there you'd even everything out. Right, right, right. It's not a lot of money. So, yeah, all of that does that.

So if you've ever done like a time management thing where you said, okay, I have a to-do list and I'm going to force rank it from the most important thing to the least important thing, and then I'm going to do the to do list in the order of most important to least important. If you've ever done that on like a yellow pad, this is the same concept, only you're just doing it with money. Yeah, yeah. I like that. Okay.

That's exactly how you get at it, man. Congratulations. Hey, thanks for calling in. We appreciate you being with us. Naomi's in New York. Hi, Naomi. What's up? Hi.

Thank God. We're doing well. Good. We've been away for the summer, and we took a job in a camp, my husband and I, and we had our basics taking care of, which was really nice, and we managed to save up a good chunk based on our job. We have $20,000 practically cash at this point and wondering where we need to be putting it towards. Do you guys have debt?

We do. Okay. How much debt do you guys have? About $50,000. It's two cars and a small personal loan that has no interest on it. Okay. How much is each car do you owe on each car? We have $15 and $27.

15, 27, okay, and the loan is 15 and 27? That's like four, yeah. Okay, and how much do you guys make a year? About 8K a month. Okay. Yeah, well, for sure the 20, or the 50 is going to be thrown to pay off, or the 20 that you guys have saved.

I'm going to go to your smallest debt. Yep, so I'd throw it at the loan, and then the $15,000 car, and those will be paid off, and then you guys just work to pay off the $27,000 car loan. So theoretically makes sense to us, but we have it right now sitting like in a high-old savings that we could easily access

and wondering if we should leave any there for things that come up like kids. I mean, we have three little ones. You should be doing a budget that includes line items for things to come up with kids. So I'd leave $1,000. dollars in there and then throw everything else at the debt yeah but don't let kids surprises be called an emergency kids equal surprises and so you need to have a budget line items that include

um suddenly they lost their tennis shoe suddenly they forgot to pay tell me about the field trip and it's always suddenly when they're seven um and so yeah you just you you anticipate that as a wise transparent and you have some of that budgeted in your monthly budget. We don't have an emergency fund and call an unannounced field trip an emergency. It's not. It was just a bad communication from a seven-year-old. Lost the paper on the way home thing. Yeah.

So, yeah, that's what we're going to do there. But it sounds a lot like Naomi that you guys don't have many hardcore processes or systems and systematizing this stuff with a good budget. It sounds very nerdy, but it's also very powerful. It will give you a sense of power over this money. And when you're running loose and hanging by the thread, you feel very, very vulnerable all the time. When you're making every dollar behave using the every dollar budget, you don't feel that way anymore. You feel power again.

Even if you're trying to struggle through something, you're at least powerful because we know we got the lights paid. We know the kids got food. We know we're not going to get evicted. but so we've got certain things we know so a lot of those things that are when they're circling in your head with no system they all equal some level of trust or stress and anxiety and you when you put them all down on paper and you go oh i got that then that's released and so your your stress level goes way down as the chaos of disorganization goes down and that's just not that's not just nerd speak it's actually the real thing it's really what happens yeah so instead of just

randomly saving money and just not really knowing, you know, what to do with it. Everything has a plan. Yeah. Everything has a purpose. Everything has an execution on it, has a name associated with it. So when you get money from your paycheck, it's kind of boring because you had already spent it on paper. You just have to dole it out according to the plan. There's no emotion left to it.

There's no sense of, oh, God, this is a problem. If you already had that back when you did the budget. So you got it all out of the way now. So you do the budget before the money comes in every single month. Now let's get that $27,000 car paid off. That thing's a boss. You may even want to get rid of it. Annie's in Los Angeles.

Hi, Annie. How are you? Are you? Better than I deserve. How can we help? I appreciate you taking my call. So here's my question. I am currently actively on baby step two, quickly approaching and eagerly approaching baby step three.

However, I have a daughter who is eight years old. When she gets, you know, money for Christmas, for birthdays, different events and things like that, we have placed all of that money into her little savers account. Now, typically what I would do is I would put it into like a six or nine month CD and then potentially roll it over. CD to CD. Yeah, that are a high yield. I mean, how much is in it? So she has accumulated just over $10,000. Good. Good for her. Okay. Yeah. So what I, what I'm good for an eight-year-old is that I write. She's doing better than most adults out there. Exactly. So I just wanted to make sure that I'm doing the best for her money. And I've heard a lot of things and I don't necessarily want to take advice from

people who are not well versed on like college funds and things like that. If you were in my shoes, what would you do with that? Would you keep it in the high yield or, you know, CDs, high yield savings accounts, or would you look at alternative investment opportunities for her? It depends on what you plan to use the money for. And that will answer your question. So I can tell you what we did, all right? we had a savings account in mutual funds for the kids college that we were putting money into

that was their kids college fund and we were funding that the miscellaneous savings account like you're talking about we earmarked that for the kids to spend and to learn to spend wisely and we told the kids when they were eight and six and whatever that they need to put money in that account because that was their buy a car account. account, and I'm not buying you a car. You have to buy your own car. I did, however, agree to match it. We had 401 Dave. You got a lot of money in this account. You may not want to match this one. But, you know, Rachel saved up, I think, $5,000 or $8,000, $8,000. And I matched it, and she got a little $16,000 beamer, a little use beamer. And it was a cute little

car, and it took her all the way through college, if I remember. And, but she paid for half of it with her miscellaneous account. So she threw babysitting money in there, dog sitting money in there, whatever book sales she made at the back table selling Ramsey books at an event when she's 14 years old. All of that went in there. And anything she put in there was going to be doubled for her car. So it was kind of her car fund. And that's the way we brainwash the kids that that's what it's for. If you're going to do that, a high yield savings is fine. If you're going to send her to college with it, if you're going to make her pay part of her college with this money, you may want to put it in a mutual fund in a $5.23 or $5.29. 529. Okay. Yeah, it just depends on what, you know,

what do you want the money to be for? And here's the thing, the money really doesn't matter. It's a lot for an eight-year-old, but what matters is the lesson that the kid gets out of this. What muscle are they building in the financial world? Are they learning to save? Are they learning to work and save to hit a goal like buying a car? Are they learning to work and save to hit a goal like going to college and I'm going to pay part of it so I actually freaking go to class because I paid for it instead of championing in beer pong, right? It changes the equation when you've got skin in the game in these things and the lesson is what's important, not the dollar amounts because the dollar amounts aren't going to matter. They're not enough to matter. If she learns

the smart stuff, she becomes a millionaire off the smart stuff, not the $10,000. Yeah, exactly. the savings part and contributing towards it is an activity that she enjoys. Yeah, there you go. And, you know, it's great. Right now, her focus, and if I was to tell her, hey, this is going to be for your first car, you know, that wouldn't really have much impact to her at her state of where she is at 8. No, we told them real clearly. Listen, it's very important.

And we would show them cars at 8 years old and go, it's what this car costs, because if you don't start saving, you're going to have a nice bike. Yeah, but I hear what you're also saying, Annie, that, I mean, is there anything in the near future that maybe she wants to save up and pay for, right? I mean, and I do think that that's what, I mean, I have an eight-year-old, and that is one thing that we do is, hey, what is something you want? Caroline, literally right now, is saving for a mini trampoline because we're not buying a trampoline. So she's going to buy a little mini exercise trampoline. It's $40 on Amazon, and she's working to save. for that so because so she's in it so she's feeding june she's taking our dog out i mean like she's got her little chores and it's motivated her and so that so i hear what you're saying annie the yes a car

can feel it feels so far for an eight-year-old but that conversation that's so awesome that conversation information i learn on the radio is uh yeah but the car conversation really really amps up um in about in about 20 more minutes when they're well it's gonna be quick yeah but i mean 11 12 13 14, 15. I mean, they're, yeah, they're heading that way, for sure. And for those of you out there listening, do put a limit on this. I wasn't smart enough to do that. Rachel saved 8,000. Her little brother had a head start on this because he had a big head start. He had watched his two sisters do it. And he's a savings maniac. And he about broke me, so with the doubling thing. So you do need to put a limit on it. And I had to have a conversation.

We're not buying a new Ferrari, okay? So, um, you know. He didn't have that. No, but I'm saying I had to have a conversation. We're not spending that on a car. It was unfair. You're 16 years old. To a degree. Because you started this plan all of a sudden at the same time. So Denise got the short end of the stick.

So she started when she was seven. It was rough for her. No, it was no. She was older than that. And then I had two years on her. And then Daniel had four years. So he had six years more of savings than Denise did. The three of you were so abused.

So, Hey, hang on. We're going to send you a copy of the first bestselling book Rachel Cruz ever did. with her dad. It's called Smart Money, Smart Kids. And it's about teaching parents how to teach kids. And so we'll send you a copy of that as our gift. We appreciate you calling in. Christopher's in Palm Springs. You're going to do that right now? Right. Do what? Okay. Yeah. Got about 10 seconds. No, we got about four minutes. Christopher's in Palm Springs. Hi, Christopher. How are you? Oh, we do. Hi, David, Rachel. I am very excited to speak with you today. I'm a teacher here in California and just wanted to get your thoughts.

on how much we should be spending maybe monthly or yearly on our classroom? I have an unpopular stance on that, and you're a great guy and you're a wonderful teacher, and so you're not going to go with my stance. I wouldn't spend a dime on it. It's not your job. It's my stance. It's a school's job to furnish you this stuff to boo your classroom, and the parents ought to get together and furnish whatever you need.

Do you have an Amazon wish list, Christopher, that goes out to the parents? You know, I do not. Are you in an underserved community? Yes. Okay. So it won't matter. The parents aren't going to be able or probably willing to help. So, I mean, you've got to be real careful with this because you're doing this out of your love for the kids and your love of teaching.

But you can't you break yourself with that budget, can't you? definitely I've found myself spending thousands a year and really that's the school board's job is to furnish you the stuff to teach the kids and and you know and or what parents can come around and assist you on it and or contact a local church in the area and let them know you're in an underserved area and see if some see if one of the Sunday school classes or one of the small groups will adopt your classroom or something okay we the Family Foundation adopted the school, the elementary school for four years that I went to when I was a kid and now it's in an underserved area. And so we adopted it. And even our team goes over there and works and helps. And then we put money into the classrooms and all that. It was really fun because it's nostalgic for me because it's where I went to where I went to the first grade and all that. So it's kind of cool. But you know, maybe you can find somebody like that to help at some degree, maybe not the whole school, but somebody help your classroom. And it's just, I think it's, I think it's, It's blatantly unfair for a teacher to have to pay for this. I just think it is. And you guys have got such wonderful hearts and you're so giving to those kids. And thank you for that. But be real careful with that.

It's a slippery slope. It can continue. You do not have a moral obligation at all to do that. scripture the day first corinthians two nine it is written what no eye has seen what no ear has heard and what no human mind has conceived the things god has prepared for those who love him warren buffett said someone's sitting in the shade today because someone planted a tree a long time ago adams in charleston south carolina hi adam welcome to the show hey hey dude how you doing thank you sure how can we help yeah um so first of appreciate you taking the call

means a lot um so i'm calling today because i'm in a very tight financial spot currently um trying to navigate it the best i can uh basically where i'm at is i don't think i have an income problem um i do okay i'm active duty navy so it is a fixed um So what do you make? But 72. Okay. Your wife work? Just about.

No. Okay. How many kids you got? Two kids. Okay. Two little girls. All right. 72,000, two little girls in Charleston, South Carolina.

Gotcha. Yes, sir. Yeah. A part of that is I'm going through a divorce. But I'm trying to, basically budget for myself and budget for them and set them up for success. So, like I said, it's kind of tight right now, but I'm trying to make it work. A lot of that, I would say about 4,000 of that is going out the door immediately to her.

So with what I'm left over, I work with, and it pays the bills. It does what it needs to do, but... For, like, child support? No, he's trying to support. both households. Correct. That's not sustainable, brother. I mean, because you're probably only bringing home $5,500 a month, right?

You're not going to be able to do that long term. Yeah. Yeah, this isn't... Yeah, yeah. Mathematically doable. Yeah. It's a sweet sentiment, but it's not going to work. Right.

Okay. So your ex-wife is going to be working. uh that's the hope no no it's not an option she's not going to be able to eat if she doesn't right you don't make enough to support two households indefinitely nor is that wise that's what divorce brings to your ex-wife's life a new job regardless of who asked for it or who caused it. Right. So you'll be paying child support, which is a percentage of your income, according to South

Carolina law, and you will do that because you're a good dad. And in addition to child support, you'll do some things here and there because you're a good dad, and you love your daughters. But you cannot support two households, sir. That's not sustainable. Is that the expectation, Adam? What have you guys talked about? Well, yeah.

I say unfortunately, but not really. Like, obviously, child support will never be an issue. No problem doing that. But being in, when you're active duty, there is a construction in place to protect service member and, you know, any immediate, you know, spouse. There is a set limit in place that you have to abide by, which, again, no problem, but it is a percentage of what I make.

So regardless of if she works or not, that's what has to do. It's fine, but it's not 60% of what you make. It's akin to child support. We work with military for 30 years. The military does not take 60% of a dad's pay for his kids when there's a divorce. That's not true. You've gotten some bad information. Okay.

Yeah, how do I go about this, I guess? If I'm being told, like, by the military as a whole, this is what, I mean, I guess how do I navigate that? You're being told by the military that they're going to take 4,000 of your 5,000 and give it to your kids? Yeah, that's what I've been doing for the last eight months. I understand you've been doing it, but you're saying someone at the military told you that. Correct. Okay, you need to go see your senior officer and have some discussions. You've got to learn what's going on here.

Is there a lawyers in place, Adam? Like, where are you guys at in the divorce? So there's no official paperwork or anything yet. It's just a separation period. And we're getting to that point here in the next couple weeks. Okay, because a lawyer would know all the divorce law and everything, too. So they'll be able to sit down with JAG and they can walk you through it too. But I'm going to my senior officer and find out.

You need to learn about what's going on here because I've been working in the military for 35 years. I've never heard this in my life. Now, they do require that you take care of your kids. I don't have any problem with that. But the child support numbers I've seen are more akin to what the state levies and what the state requires in most cases. And you've got to do other things to make sure that, you know, for instance, if you've got a security clearance that's based on your credit,

you've got to keep your bills paid and those kinds of things. That kind of stuff will come up in this situation. But you may want to sit down at the JAG office. We for sure want to sit down your senior officer. and I think you need to learn something about this because this, I might be wrong. Sometimes I gave out some wrong information last week on this show, but I don't think I'm wrong here.

So I just, I'm not wrong about this. I've never seen it. And I've worked with military stuff for 30 years. So, and we love the military. And we work, thank you for your service, by the way. And, but now, all right, Jennifer's in New Jersey. Hey, Jennifer, what's up? Hi, thank you for taking my call.

Sure. How can we help? I was wondering about the baby steps. We're trying to pay off some small debt, you know, $10,000 a year, I think they add up to like $50,000 or $60,000 in various small car loans and personal loans. But my husband and I have a disagreement. I think we should just pay off our work on paying off our mortgage for the next few months because I think that we can, and that would open up a huge amount of money to pay off.

It's like $69,000. And the monthly payment is $37. So I feel like if we paid that off, it would open up all this money to be able to pay off all these other little debt. So $109,000, you're 100% debt-free house and everything. 109,000. Oh, yes, yes. How much you guys make a year? So my husband makes $1.90 and I make $150.

Oh, nice. So you should pay off all of this in a year? Yes, I suppose. Yeah, you should pay off a hundred, if you're making $250,000, $300,000, you should pay off $109,000 in one year, in which case this argument doesn't matter. I suppose that it's it doesn't matter because you're not going to be doing it long enough that the math matters in your argument. Do it in one year, $8,000 a month.

Yeah. Why can you not do that? You make $300,000,000. I don't know. I don't either. I need to do the every dollar app because I think it's pretty common. Like you just don't know where your money goes. I mean, if I look at it and I go, okay, you make $300 and I don't know, what was it, $15,000, $320,000, okay?

And we take $109 from that. That only leaves you $200,000 to live on. Yeah. How in the world will you make it? And you're in New Jersey, so you got a lot of time. taxes, but then that's still going to be, you know, 120. You ain't going on vacation that year. Right.

And you're not going to eat out every night. Right. And there's not going to be a thousand dollar bottles of wine on the equation. But yeah, you're actually going to get out of that. So, yeah, you do need to get on the every dollar budget because 300 and something thousand minus 109 equals 200 and something thousand to live on. Wham. Go do it, right?

Seriously. Bust it. Bust it, girl. And the point two being, if you're going to do this in one year, you could do the mortgage first. I don't care because you're going to do the whole stinking thing in one year. Okay. And then the $3,500 a month being freed up,

it only matters for about three months. So it doesn't matter because it changes the whole equation. If you're going to drag this sucker out for four years, then we could talk about your equation because it does kind of start to make sense then. I'm not sure I would do it, but it starts to make sense. It's a fun argument at that point. But for one year, Yeah, knock it out.

That puts us out of The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace. Christ Jesus.