The Ramsey Show - App - You're Putting Your Parent's Future In Jeopardy (Hour 2)

Episode Date: April 19, 2024

Девочка-пай 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 amazing relationships. I'm Ramsey personality, George Campbell, joined by my good friend, Dr. John Deloney. Open phones at 888-825-5225. You call us and we will do our best to help you take the right next step for your life, your relationships, your mental health, and your money. Megan is going to kick us off in Rochester, New York. What's going on? Hi. So I'm just trying to get some advice with my trying to buy a house in about February, March, 2025. I make about 68,000 a year. I am a single household, no kids, no significant other.

And because of the financial economy right now, it's not an option not to buy because rising rents. So I'm preparing to buy next year to also take advantage of a $20,000 grant that can be applied towards principal or closing costs. My situation or my question rather is what to do with some extra money. My parents are taking out a HELOC loan to pay off my private student loans. Please don't do any of the things you're doing, Megan. Is this already happened? All the things you're saying, please don't do any of these things. It's already in process. So without the student loan, I will be able to buy, but with the student loan, my minimum payment for it is $722. And I already talked to a realtor and they said, um, I may be to get approved for a hundred thousand dollar house, which is nothing. Um, he said, it's not impossible, but he was like,

it would be very, very hard to find a house. Um, so all of the documents are already signed and everything for the HELAC um and it would it would free up uh $455 out of my monthly payments I know but it just put your parents house on the block and so whenever you buy a house make sure you've got space for them to move in with you someday because their their chances of retiring just went way down man okay they already are retired I want to go back to the thing you said earlier um i i my initial gut reaction to you had something about rents are going up so it's just there's it's there's only one path forward anytime somebody says there's only one path forward there's only two options i always want to just pause and

completely clear the deck talk to me about that because i so i would rather like just listening to your story i would rather if you were my sister you were my kid you were one of my best friends i would tell you dude don't do any of the things you're doing move in with your parents if that's the option move in with them for a while um Talk to me about how there is just simply zero, no chance, no how can you rent a house for a season or an apartment? I am renting right now. I'm renting a one-bedroom apartment for $1,000, but rents are continuing to rise. My parents live in New Jersey, so we live in totally different states and the job market for my field is not there. What's wrong with paying $1,000 for rent and making $68,000?

That's not the problem here. No, if it would stay $1,000, that would be great. Let's say it goes to $1,100. $1,200. $1,200. $1,500. It's still not the thing that's holding you back. No.

So my issue is if rent keeps rising it's going to lower the amount that i can save for a house and interest rates going up it's going to get to the point where i'm i'm too underwater to even get a house do you have insider knowledge that interest rates you're going to continue to go up i don't but you know something you're on the you're on the internet so so much um here's here's the deal we we may not be able to help you because it sounds like you got this all figured out i i would tell you just as a guy that's owned a bunch of houses and a guy that um had to go see a doctor because i was so catastrophic in my future predictions. And by the way, they've all, a hundred percent of them I've been wrong on, all of them.

I want you to solve for peace, not for imaginary catastrophes that have or haven't happened yet. Are rents going to go up? Yep. That's the way rents work, especially in a culture that refuses to build new homes, that refuses to build new houses to let people build. So, yes, rent is going to go up. Is it going to go up to the tune of putting your parents' house on the block? No, it's not. Even if it went up 100% and your rent was $2,000, you can still afford that somewhat comfortably on your salary. Annoying, but somewhat comfortably. And I don't believe that interest rates are going to go up indefinitely from now and forever until the end of time.

Or saying is this desperation is going to lead you to make a rash and poor decision when you're not ready for it. So how much debt do you have? I have about $115,000, including that $48,000 from the private loan that's getting paid off. So even with your parents taking on this HELOC, you're still going to be left personally owing $80,000? Yes. My federal student loan is in deferment until 2026. Um, I have a $25,000 car loan left and a $5,000, um, personal loan. What, what, what career field are you in?

Uh, like social work care management. Okay. Um, I used to teach graduate counseling courses okay mental health professionals and i've had to have this terrible uncomfortable awful conversation and that is with particular students in particular situations i believe you when you tell me you were put on this earth to sit with hurting people and to figure out how to support and love hurting people in our communities, the least of these, and how to navigate the messy systems that they have to navigate. And I'll also tell you, I told my students, it is unethical for you to stand up in front of people and help them. And at the same time, you'd be so terrified that you can't breathe because of how much money you make. And so at some point, you may have to say, okay, either I got to take a second job for two or three years until I can

right this ship, or I'm going to have to go get a different kind of job and put my calling on hold for a season because I simply can't afford to live in the place where I want to live and do the job that I want to do. Because it sounds like I have a second job. Okay. Yeah. That's what I was afraid you were going to say that you've already had to me. Here's my fear. Your biggest war is against math and it's not going to change.

And you owe 150 grand and your parents are going to, are going backwards to help. And you're going to go backwards to help. And you're going backwards to try to get, you see what I'm saying? It's just this, you're just, you're in a car and the, and the wheels are spinning. And I'm only telling you this because I love you and I just don't want to see you go so deep. I want the world to be able to experience your help as a trained social worker because we need you, but you can't breathe right now, right?

I'm, I'm living comfortably where I am. Like I said, I just, because I have, my total expenses monthly is about $3,400 and I bring in a little over $5,000. Good. That all needs to go to the debt. What's your car payment, Megan? Let's go to debt. $575,000. What's your personal loan payment? $205,000. Okay. I just added that up. We're talking personal loan payment? $205. Okay. I just added that up. We're talking $1,400 in debt payments.

$1,000 rent is not the problem. You could free up $1,400 if you got aggressive at this debt. Hang on the line. I'm going to send you a copy of my book, Breaking Free from Broke. I want you to read it all the way through and send me a DM and let me know if that helps and if we can help in any other way. So hang on the line. We'll send you a copy of that book. Wishing you the best. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Open phones at 888-825-5225. It's time for a question of the day. And today's question comes from a student, Travis B. from

Bryan High School. All right. The question is, how do I approach my parents to talk about money when I'm learning about the baby steps and they never have been very good with their own money? Great question, Travis. Good question. Does Dave call this one powdered butt syndrome? Like parents don't want to hear financial advice from the kid that was changing diapers yeah two things they usually

don't want to hear about sex and they don't hear about money like i don't want to talk to you about that i changed your diapers right um i think this is going to depend on your household so for instance in my house i do not want to raise a son and a daughter. I've got two kids. I don't want them to raise, I don't want to raise two kids that are compliant, meaning they never ask me to explain why I do what I do. Or if they see me having trouble with something, my son the other day said, dad, why don't you just pick all that stuff up and take it out of the car when you get here instead of getting all mad when your coffee won't go in the coffee holder and it's full of all these cans you raised a prodigy well i looked at him i was like how about you just shut your right but i want

my kids to question things because i don't want them to go out into the world and just accept whatever culture says right and so in my house I would love for my son to be like, Hey, I don't understand why y'all have so much tension. You're always complaining about bills and you'll have these credit card things. I'm learning about it. Can you teach me about that?

Like, and that's, that's how we teach our kids. Obviously be respectful. I've learned, which I'm doing is just naive. That's not how most people do it. And so most people,

parents don't want to hear anything from their high school kids especially points of pain in the household and so this is a good moment when i think all high schoolers college students begin to imagine their world as they get older and sometimes we want to take things from our childhood i want to be a dad just like my dad or sometimes we say i'm never going to the opposite direction i don't ever want my kids to experience what this is and so i think this is one of those moments that maybe you can't um maybe you begin to get your summer job or your your everyday job and your parents are like well you got money you say well i'm saving this much money. I don't use credit cards. I don't use debt.

I'm following the baby steps. And maybe it's an invitation for them to say, well, tell me about that. Versus I'm going to lecture my mom and dad. That ain't happening, right? Exactly. And part of this, you know, we're taking this question. It's financial literacy month. And one of the ways we're celebrating that is taking questions from actual students at

high schools that are teaching our foundations and personal finance curriculum. So the interesting part is these students are going to school learning how the credit score is a scam and how credit cards keep people broke. And then they're going home and they're going, hey, mom, here's what I learned today. And the parents are like, what? They taught you what? You need debt, son. The credit score is a good thing. So naturally, conversations will be struck up from this. And so if I was the student, I would come home and they go, hey, son, how was school today? I go, it was actually really cool. We took this finance class and I'm learning about credit scores. And did you know this? If you come at it from a place of just like curiosity, empathy, excitement, hopefully if you have healthy parents, they'll go, tell me more about that. Really?

Or they'll call the school district and be like, let's ban that book. Ban the book. Yeah. We need to teach our kids that there's good debt and they should all be taking it out. So part of this is- Fire that teacher for teaching my kids something I don't agree with. This might be a 10-year journey of trying to convince your parents that there's a better way to handle money and it might never work. And you have to grapple with that. But I think the best way to talk about it is from your own perspective, your own experiences, and asking good questions. And you can disagree politely.

Don't disrespect your family here. But you also don't pay bills. So, again, they're not going to take your opinion with a lot of weight when they're still covering all of your expenses. And be – all high school kids, be slow to judge your parents because you don't know the full picture of what full picture of what they're going through and they're not having every conversation with you and you think you know everything but you don't um and i also think very few people don't like to teach something that they know and even if they're not great at it right so maybe the approach as a high school kid is hey we're learning we're taking this finance class we're learning all about money will you teach me about how y'all budget like can i can i sit and watch y'all budget because i don't know how to do this i'm learning this at school and you might

find yeah we don't do that in our house and then you might ask would y'all be willing to do that i'm learning about at school i just want to like try it can you help me with mine right can you teach me with mine and so everybody likes um to to help somebody when they come and sit before him and say, will you teach me something? Yeah. That feels good. And planting some seeds and going, hey, I'm going to go buy the Total Money Makeover

and Breaking Free from Broke and go, hey, I'm reading this book. It'd be really fun if you guys are open to it. I'd love to read it with you guys. And we talk about it as I learn about money. Again, trust me, I'm not the parent of the year. But one of those conversations I started when my son was younger was, I'm going to read a book and occasionally I'll say,

you've got to read this book. And he gets the right to say, Dad, you've got to read this book. And so I find myself reading these science fiction-y, I don't understand them, but here we go. And my son's sitting over there reading The Comfort Crisis by Michael Easter, right? He just buzzed through the Anxious Generation book by the author of The Coddling of the American Mind, Jonathan Hyatt. He read it before I did, right? And it was on the desk.

And all I have to say is if you start when your kids are young with this idea that we read books and you read a book and you read a book, then maybe when your high school kid stumbles on something that's important to them, they already have a mental map of, all right, let's read this together. And you can go with them on that. That's beautiful. Well, I hope that helps. Travis B, hope that helps you. There's no easy way to do this and it may not go well, but you lead with empathy, humility, experience, and curiosity. I think it'll go better for you. All right, let's go to the phones. Haney is in Chattanooga.

What's going on, Haney? Hey, so I'm getting married in August, and I've only got a car loan. That is the only debt that I have in my name. And she doesn't have any debt. But I'm wondering, is there any way that I can get out of this debt before I get married? Because I know the number one reason for divorce in marriage is finances. And I want, I want our marriage to succeed. Obviously I do, or I wouldn't get married. So I'm trying to figure out how I do that. Or if it's even possible, if I just need to do the beef and rice and pay it off

and just, just get at it. Well, I'll tell you this. Based on how you just set that all up, your marriage success is not going to be based on whether you walk into this with a car loan. And so I don't want you to hold that pressure over you, like, I'm a bad husband already, I'm a failure. I think your spirit to want to set your family up for success aggressively, that's what's going to carry you. And it's fights about money or it's misalignment about money,

not the actual debt amount that you walk into a marriage with but it sure helps when you can walk in with no debt so what's your car loan what's left so uh it is uh 35 one right now how much do you make a year i make around uh 40 000 give or take some the i make 20 an hour but i do make commission on certain things so when you say 35 one are you talking about $35,000? Yes, sir. I'm sorry, $35,000. Okay.

Sell it, homie. Bye, Felicia. You will be out of debt by the time you're married because you're selling this thing next week. Today, this weekend. Well, the thing is, I'm upside down in it. I made a bad financial decision back in 2020. My car had broken down, and I bought a 2011 Jeep. And basically I bought a linen. So

a couple months ago that I brought it to the dealership, I'm like, Hey, I can't drive this anymore. It's been in here more than I've driven it. And they're like, okay, we've got this brand new 2024 Toyota Corolla. Brilliant. You can do a trade with you. And the way they played it out to me, it would just be an even trade. And I didn't really pay attention. It's stupid of me. I realize that. How upside down are you?

$8,000 upside down. Okay. So even if you sold it today and you have $8,000 in debt plus $5,000 more to go get another car. Right. You just cut your debt by $22,000 more to go get another car. Right. You just cut your debt by $22,000. Right.

So you go to your local credit union and say, hey, I'm looking for a loan for $13,000. That'll cover the $8,000 you're upside down on and give you $5,000 to go get a beater car for now. Okay. And you're going to have some head hanging because you're going to walk around with a little bit of shame because you were driving a brand new car and now you're driving a car that your fiance is going to be like, oh, are we still in love? I don't know if I still love you. Just kidding.

She'll still love you. Honestly, if I got rid of this, I do not care. I don't have a problem with driving an old car. I'm playing with you, of course. I know. But yeah, I would. You got to scrape together a difference, either with cash or with a loan. And that's the only times we say it's okay to get a loan because this is getting you

out of debt so much faster. So I'm wishing you the best. This is not going to be fun. We're amputating the Tahoe, or in this case, the Toyota. Never trust a dealership, man. You got hosed. And I'm sorry, but hey, we're going to send you Financial Peace University as a little wedding gift on us. So hang on the line.

This is the Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. The number to call is 888-825-5225. We are about to kick off our live event season. We've got the Entree Leadership Summit event happening soon. And we also have Total Money Makeover Weekend happening May 10th and 11th. And this is the whole gang, all the Ramsey personalities, Dave Ramsey, Dr. John Deloney, Ken Coleman, Jade Warshaw, Rachel Cruz, myself. And we are going to help you create good, healthy money habits and change your relationship with money for good. So we're going to cover all the things you want to know. We're hitting the classics, of course, getting out of debt, creating a budget, communicating better with your spouse about finances, easing anxiety around money with Dr. John Deloney, how to make more money, and from the long-term and the short-term with our friend Ken Coleman, how to invest,

build a retirement of your dreams, how to own a home instead of it owning you. All of that is happening. So this weekend-long event is the ultimate motivator to get you fired up and live the life you've always wanted. We're going to be doing a live taping of Smart Money Happy Hour with Rachel Cruz and I on Friday night. You don't want to miss that, along with a kickoff from Dave. There's going to be live interactive Q&As throughout the weekend. We'll all be hanging out, meeting you. It's going to be such a good time we had a great time last time we did this uh a different event up there at the new rec center and it's a it's a destination event now people come from all over the country just to see us and hang out yeah and i kind of got my feelings hurt we weren't doing a live recording of my show and then i realized

probably not probably not good for for morale yeah we want this to be a pep rally john not a whoa yeah i mean your show is wonderful yeah but it's it's it can be awkward with a couple thousand people and their kids in the audience yeah maybe not not quite cut for a live event crowd quite yet not live family event crowd that's right yeah but hey this was adults only perfect that can be a separate event that's an add-on so don't wait to get your tickets. Platinum tickets already sold out. You can still get VIP. Sorry, Platinum Plus is already sold out. We have Platinum and VIP.

A few left there. General admission is still available. Get your tickets now at ramsaysolutions.com slash events. Get it in the budget. Plan to join us. We are less than a month out, and we're getting pumped. All right, Jonathan is on the line in Atlanta. What's going on, Jonathan?

Hey, George and John. Hey. How's it going? What's up, guys? Hey. pumped all right jonathan is on the line in atlanta what's going on jonathan hey george and john hey how you doing i'm doing all right how can we help today well just to start this off i got a lot of pressure on me and i'm just trying to figure out my options i guess you could say um what kind of pressure yeah where's that pressure coming from my family unfortunately wife kids who who exactly uh my dad my brother how old are you um i'm 23 all right They don't get a vote. Are you hearing me? I'm not even laughing. Normally, I'm kind of a clown. I'm not even laughing. I can hear it in your voice, dude. They're burying you. They don't get that privilege anymore. What's going on? Well, both my brother and dad, they... Don't care about them. them tell me about you what's going on with you

i'm stressed out man i know you are i can hear it i can hear it what's up i'm i'm looking a way to increase my income so that i can have like a good nest egg for my future and also like gain some skills and whatnot. Um, I'm only making 36,000 a year right now. And I don't know if I'm like heading in the right path. What do you do for work? Um, I'm a Lowe's, uh, sales specialist. Like I sell like, like washing machines and fridges and all that stuff. Okay. Did you go to school? No, no.

I almost did, but I backed out at the last second. Okay. So what are you wanting to do? If we snapped our fingers and you had a career, do you have something in mind? You're like, this is really what I'm aiming at? Or are you totally lost in this space? If I'm going to be honest, a bit of both, but I always wanted to own my own business. I do have a small business right now. Like I make little, like small, little wooden

tech decks and all that. And I sell it out to people. It's a small business, but like in the future, I would actually love to upgrade to full size skateboards, you know. Okay. So kind of woodworking and with a niche of making skateboards. Yeah, and, like, sales here and there. Like, I'm also really good at sales for my job as well, yeah. And where is the pressure coming from? Is your brother and dad like, hey, dude, you're not doing well? Like, what are they saying to you? Well, this is going to sound weird. Quite the opposite, actually. They're telling you like,

oh, we see something in you. We think you can be successful and all that stuff. And they've been saying that, I guess, all of my life. And honestly, I do not want to let them down. I'm sorry? What's their end game with this? Do they have a business together or something they want you in on? What's the end game here? I don't want to let them down. I'm sorry? What's their end game with this? Do they have a business together or something they want you in on? What's the heart behind that? Honestly, I don't even know. Dude, they see their brother and their son making $36,000 a year as a salesman as a 23-year-old.

And I know that's not a ton of money, but in the place that you're doing that, you're doing a good job. And you help guys like me who literally know nothing. And I come into Lowe's and I say, hey, can you help? And you're like, yeah, I got you. What do you need? I think beneath your dad and your brother, you don't like you, man. I can hear it.

Why do you think you have failed, man? You're 23. You're learning the ropes of a huge corporation and how to sell and helping out people from elderly folks to knuckleheads like me to even more knuckleheads like George. You're helping, like you're learning how things work. You're 23 years old. And if you figure out sales at 23 and 24 and 25 and then all of a sudden you're running the department or you move on to selling oil equipment, you're a multi, multi-millionaire. But you don't like you, dude. Why? or you move on to selling oil equipment, you're a multi-multi-millionaire.

But you don't like you, dude. Why? I feel like I could do better, I guess. What does that mean? Be very specific. Paint me a picture. What does better mean? I really want to help my dad, my brother. Stop, stop, stop. You, you,

what does better mean? Because they love you. They see it in you. And I bet they're telling you that they see a spark in you because they're tired of watching their son and their brother walk around with their head hanging down. Or let me put it this way. You are making more money than I was at 23. I don't think this is about money. Or nest eggs. I think you're not sure what your purpose is and you're

listening to a lot of voices and you haven't really figured it out for yourself. And I'm not sure you believe in Jonathan anymore. Well, that hit hard. Yeah. So, man, close your eyes for a minute. You're 33. Not dad, not brother.

What do you want to be doing, man? I guess owning a business. Okay. Making sales and yeah. Then I would tell you, if you were my brother or you were my son, you are right where you need to be.

And you probably need to be doing some stuff on the side because $36,000 is not a ton of money in today's economy. Or you need to be asking the folks at Lowe's, hey, what's the growth path? Yeah, how do I move up and sell bigger ticket items? I don't know a lot, but I know that a good salesman can move industry to industry.

A good salesman is a great person to have around because they just know how to talk to people. They're good with relationships. That skill transfers, and you can make crazy money. Everywhere. And we talk to those people on the show. So, Jonathan, we believe in you, and one of the ways we're going to help you believe that is by gifting you a few items. One is John's book, Building a Non-Anxious Life, because you said you're stressed. This is going to really help with some really tactical things you can do. Another one is Ken Coleman's book, From Paycheck

to Purpose. That's going to help you figure out that clear path to doing the work you love. And finally, I'm going to give you Ken's new book, which is on pre-sale right now, Find the Work You're Wired to Do. It includes his Get Clear Career Assessment. I want you to take that, and it's going to give you a much better picture. You're going to call us back and say, I know exactly what I'm supposed to do. I'm feeling so much more encouraged. I'm on the path. And stop listening to voices that aren't helping you grow, my man. We believe in you. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm George Campbell, joined by Dr. John Deloney. If you're enjoying this show, be sure to check out all the other great shows on The Ramsey Network, including my friend Dr. John Deloney's show on podcast and YouTube, and, of course, George Campbell YouTube channel, which is popping off. Not quite as big as John's. John's has had a hockey stick lately. I don't know what happened, John. Yeah, trust me, I is popping off. Not quite as big as John's. John's has had a hockey stick lately. I don't know what happened, John. The team's been doing a killer job.

I don't think it has anything to do with you. Zero to do with me. But congratulations on all of the success. And of course, all of our personalities have some great shows out there. So if you get tired of the Ramsey show, there's so much more to choose from, and it's free. So go check it out. Podcasts, YouTube, you can check out Ramsey Network,

or wherever you listen to podcasts, and catch up this weekend. Joseph is down the road in Nashville, Tennessee. What's going on, Joseph? Hey, guys. How are you doing? We're doing well. How are you? Doing pretty good. So my question, I just listened to the audio book of the baby steps millionaires, and I got a lot of good insight out of that. I put my thousand dollars in savings. So I was moving on to step two. And one question I have, I get a quarterly bonus at work and it's usually around

somewhere between two and 3000. So I've got two credit cards that I'm looking at paying off, one $6,000 and one $7,500. So my question is kind of how would I take that extra money and what's the best way to apply that to those cards? Just, you know. Well, I love that you're wanting to aggressively attack this debt. Do you have any other cash in the bank? I mean, just my regular cash flow, you know, as far as my regular job. Okay. So I do pay a little more, you know, than the minimum balance on those. So I'm trying to knock it down that way.

But I definitely want to leverage these quarterly bonuses to help me, you know, knock out those big chunks. Well, with the debt snowball, you would just lay them out smallest to largest, ignoring the interest rate, and that bonus would cut that one 6K card down to three, right? Yeah. Yeah. That's kind of what I was thinking. And you'd make minimum payments on the other card and keep attacking that smaller one until it's gone. And then you'll free up that payment. You can roll that into the $7,500 credit card and again, aggressively attack that one. Is that all of your debt? Yeah, that's it. Yeah, I don't have any car payments. I do have a house, so obviously that would be the next step. Okay. What's your household income?

I am the only income earner, and I make a salary of $124,000 for the bonuses. Wonderful. What caused you to go into this credit card debt if you're making $124,000? Well, at the time, these weren't really typical spending habits. I don't really leverage those cards for clothes or any shopping or anything like that. I had some incidentals pop up, like an air conditioning unit go out and things of that nature, where I just didn't have the emergency fund set aside, right? And so that's kind of what spawned me into looking into setting myself up for a better situation for the future, getting my finances in order. Well, you'll be down to about 10K of debt after this bonus,

and making 124K, I would set a very aggressive goal to go, hey, could I put an extra two grand this month on this card? I'm going to be done in five months. And then I'm going to start building that fully funded emergency fund. And that becomes your, I never need to go into debt again fund. And when I cut up those credit cards, man, this amazing thing happened. I was unable to go into debt. I couldn't do it. You just can't do it by overdrafting your checking account. And so I think that's a great plan for you. As soon as you get these cards paid off, cut them up and never look back. Kyle's up next in Des Moines. What is going on, Kyle? How's it going, guys? We're doing great. How are you? Good. Yeah. So I'm calling. I have about 78K debt. The majority, I mean, it's like 35, 37 is, um, my house and like 26 is, um, vehicle. And then I have the remainder is like a student loan.

You only owe 35 K on your house? Yeah. Yeah. Wow. Amazing. What's it worth? Uh, and you know, I, with the housing market right now, I honestly don't know. Yeah. Yeah. Wow. Amazing. What's it worth? And, you know, with the housing market right now, I honestly don't know.

I mean, I'm in Iowa. I have an acreage. Cool. It's a five-bedroom house on six acres. So $42 million in today's market. Well done. Right. But so I have a large family. I have four children and a fiance. And we had discussed possibly selling my acreage to kind of eliminate the debt. And there's like a situation where we could possibly get some land and throw a house on. But then it's like, okay okay then we're just acquiring more debt i'm sure but i guess my main question is is should i attack my vehicle first i i'm new to dave's strategy so i'm a guy who's got a house on some acreage and i would tell you

let's exhaust every possibility before you start selling dirt. Is that fair? Yeah. How much do you make? What's your household income? I bring in about $70,000 a year. Okay. My fiancee, we just had a kid last year, so she's kind of just doing odds and ends stuff to make ends meet right now. Okay.

Are you guys struggling to just pay the bills right now? Kind of, but not really. I think it's more lifestyle living that's affecting us. What's the car worth for the truck? It's a Kia Sorento. I honestly haven't even looked it up. If you're really feeling the pain,

you could always downgrade in car and pay cash. If I'm you right now, I would sell that car before the weekend is over. Right. Yeah, because we had talked about, like, she didn't want to go the minivan route. I was all about the minivan route. So we ended up going with SUV because of winters here in Iowa. But I've kind of been pushing the minivan route more into her head. I would go with the used Camry route for a while.

Yeah. And I know it makes it a pain for getting strollers in and out and car seats in and out. I get that. I got kids. But right now, y'all are broke. Yeah. And I would rather give up the convenience on the day-to-day stuff

and bring peace back into my house. Right. I would sell that car and that would knock off, what, half your debt right there. Yeah. Your house, we don't even consider that part of your consumer debt problem. Right? So you not, like, back your house up for a second, pay your car off. I mean, sell your car.

And the student loan is the smallest, right? $10,000 car and you're good to go. Yeah. So if you sold this car, downgraded, knocked out the student loans, that just leaves your mortgage. And so are you doing an investing right now? No. No, I'm just, I'm honestly paycheck to paycheck.

I need to get on budgeting somehow. Well, I'll give you the spark notes here, and then we'll give you a free tool to help you with the next step. So the baby steps, as they're laid out, they've been working for 30 years when Dave came up with them in this order, and they work every time you work it. So baby step one is $1,000. You have $1,000 in the bank?

Yes. Good. Okay, baby step two is going to be knocking out all of your consumer debt, everything except the house, using the debt snowball method. And all that means is smallest to largest balance, ignoring the interest rate, throwing as much as you can on the smallest debt, make minimum payments on the rest. Okay. And I've done that. I mean, I just knocked, like, just last week, I knocked out $8,000, $9,000 in credit card and those.

Amazing. I heard you guys on the last guy. Good. Thank you for listening. Cut those damn credit cards up, correct? Yeah. Cut them up. Cut them up.

Close the accounts. They have not been a blessing to you, and they will not be in the future because you're the secret sauce. Your income, not a credit card company's cash back or points. And that freed me when I did that when I was a young man 11 years ago now. Quick question, and I don't mean to take up all your guys' time, but so Dave Ramsey, he's basically, don't even worry about your credit score, right?

Because I'm assuming when I cut those credit cards, my credit score is just going to tank. It might take a temporary dip. My credit score is zero. Right. The funny thing is, when you think about it, why I stress about credit scores, credit scores allow you to take on more debt.

And so our job is to help people get out of debt. Yeah, and that's what I caught from the last conversation that you had with the other guy. You already have a house, so you're good. What do you need a credit score for? Kyle, if I gave you a million dollars today, one million dollars, your credit score would stay the exact same. Yeah, sorry, I didn't mean to cut you off there. Yeah, your credit score would stay the exact same. Yeah. Yeah. Sorry.

I didn't mean to cut you off. Yeah. Your credit score would stay the exact same because it's not a reflection of your wealth. Your checking account is. Your bank account is. Not your credit score. Yeah. Okay. So from your guys' perspective, I'm 38.

I need to take on more jobs to become a millionaire, correct? It's not necessarily more jobs. You do need to increase your income. You got four kids and you have a great income, but man, we got a ways to go. So you're 38. You still got a good, you know, 30 working years left to clean this up and build a nest egg. And we're going to help you. We're going to gift you Financial Peace University. Watch all nine lessons with your spouse. We're also going to give you every dollar premium to make a plan for every one of those dollars coming in. This is The Ramsey Show. you