The Ramsey Show - A Bigger Paycheck Won't Fix Bad Money Habits

Starting point is 00:00:04 Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken. Common Sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union Studio, I'm Dave Ramsey. This is The Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author, and my daughter is my co-host today.

Starting point is 00:00:33 Richard is in Fort Worth, Texas. Hi, Richard, how are you? I'm doing well, Dave. How are you doing well today? better than I deserve. What's up? Hey, so my wife and I are on Baby Step 4. We're trying to save up to buy a house now. We currently have 80,000, and my parents are willing to put in 50, so a total downpaying of 130. The problem is in the Fort Worth area, property taxes are very, very high, and any home with a value of under 270 is going to have major foundation issues.

Starting point is 00:01:10 And when we have found a home that we do like and we want to put an offer in, every time we've been outbid by quite a bit. So do we continue looking or do we just take our money, give up on the getting a house and just put that money towards retirement? Wow. Yeah. And that's putting half down. Yeah, yeah. That's pretty cool. I like your idea.

Starting point is 00:01:36 Well, I sorry you hadn't been able to find a house yet, but I suspect you will if you continue on the journey. House hunting is never a perfect process. It's not like going to the grocery store and just walk down at Costco and get five gallons of peanut butter and not think anything about it. You know, you do have to hunt. And yes, there are some foundation issues in the Fort Worth area. It's the nature of the soil you have there. but to say that all homes in that price range in Fort Worth have foundation issues is not a true statement. That's a little bit over-dramatized, to say the least.

Starting point is 00:02:15 Well, we've been looking at homes for six months, and I can count on one hand the amount of homes we've seen without foundation issues. Well, Richard, what if you guys limited it down to a 20% down payment and got a larger home? Or not larger, sorry, but more not that its size has to, not that it's larger in size. but in quality and in value. Richard, the idea that all homes in Fort Worth have all but five have foundation issues, honestly, I'm going to call you out again. That's bull crap, okay? That's not true.

Starting point is 00:02:49 That's just not true. You may not have found them. I don't know what you're looking at or what your deal is, but that's just not true. Otherwise, the entire city of Fort Worth would have fallen in by now, and no one would live there. And instead, it's quite a prosperous area that does very well. It's a wonderful town. And so, but yeah, but you're not wrong in the fact that there's probably a lot that do. It is a foundation to issue in the Fort Worth, Dallas area in general.

Starting point is 00:03:18 It's a soil thing, a sand content. And so versus Tennessee where we got rock and clay, you want a basement here, you've got to get dynamite involved. So, because we grow rocks like people grow trees. but so I mean it's something all the time but the other question is this what to what extent is the foundation damaged is this a structural problem or did you walk in and see a hairline crack and go into drama mode because I've never poured any concrete and I've been in the real estate business most of my life that it didn't crack eventually a hundred percent of concrete will shift and crack there's just no such thing okay because soil

Starting point is 00:04:01 moves, earth moves. It's life. It expands and contracts with moisture and freezing and temperature. All that. So are you overdoing that? Well, yes, I would ask all those questions for sure. And then I also would say, okay, well, maybe your expectations of what you get for a $260,000 house is maybe not up to your part. And so maybe you either lower your expectations of what you're going to get, or maybe you say, hey, you know what, let's use this instead of a 50% down payment, let's do a 30%, right? I mean, like, assuming you have the income to support that. 100%. Yes.

Starting point is 00:04:34 So I'm like, there is a reality to what you can buy with this amount of money and what you're seeing, sure. But I agree with you to just make Blaken full statements about all houses somewhere. Yeah. Cameron and St. Louis. How are you, Cameron? Good. How are you? Better than I deserve.

Starting point is 00:04:51 What's up? I need to know if I should use some of my investment money to pay down some student loans and a car loan. How much do you have in investments? About 30,000 that I can pull out, and then I have a couple different accounts that I could take some penalties on, but try not to do that. Is the 30,000 in non-retirement accounts? Yes. The other accounts are retirement accounts with the penalties? Yes.

Starting point is 00:05:22 Okay. And how much debt do you have? I have 3,000 assumed loans. My wife has 18,000. and then we have an 18,000 car payment. So you can't clear everything? Pretty close to it. I have something saved up to in savings.

Starting point is 00:05:40 Oh, how much is that? About 5,000. Okay, so you got 35, but I thought I heard 18 and 3. And what was the other number? 18, 18, 503. So I guess, yeah, I have about 40,000. Yeah, so you don't have enough money. Okay, all right.

Starting point is 00:06:00 I thought I heard that right. Okay. But you're close. All right. So you've not been listening to us a long time. I take it. No, just started a couple weeks ago. Okay, cool.

Starting point is 00:06:10 Well, welcome. We appreciate you being here. We're weird because America runs around going into debt all the time. And what we discovered several decades ago when I went broke and lost everything was that the shortest distance between where you are and wealth is not savings. It is clearing off all debt and staying out of debt because your most powerful wealth building tool is your income. And when you don't have any debt, you can use your income for generosity and for wealth building. And you will become wealthy much faster than those investments will make you wealthy. So all of that to say, we're all about getting people out of debt so that they can become wealthy faster.

Starting point is 00:06:58 Yes. Which is going to lead us to the answer. how much. Yeah, which is going to lead us to the answer to your question is, yes, we would clean out the savings and the investments, and we would pay off your debts smallest to largest. So I pay off the, you said you had a little credit card, and I'd cut it up, no more using it, and I'd pay off the car and never buy another car the rest of your life unless you pay cash for it. Okay. Ever again, because car payments will make you broke and keep you broke. And then we're going to clean off the largest debt, most of it, but not quite all of it, which was the student loan, if I heard my money. numbers right. Yeah. Okay.

Starting point is 00:07:35 And see, now you don't have a car payment, now you don't have a credit card, and now you're on a written budget, and you're going to knock out that last little bit of debt. And without all those payments, if you just took all those payments and invested them for the next 15 or 20 years, just that will make you a millionaire. And we're going to take you much further than that. I guess I have another question. Okay. Does it matter what our income to our debt ratio really is, I guess, because.

Starting point is 00:08:03 Because me and my wife are both engineers and make quite a bit of money. But I don't know if it makes sense to pull all this out or just keep doing it. How much do you guys make a year? I'm just curious, combined income. With my bonus, we make about $200,000. Okay. I'm going to send you a copy of the book Baby Steps Millionaires. We did the largest study of millionaire's ever done.

Starting point is 00:08:25 And oddly enough, the number one career track of the typical millionaire is engineer. Because you guys know how to work a system. and I'm going to teach you a system. And if you'll follow it, just like you follow engineering principles, it will work. And so, no, it doesn't make any difference. You can't out-earn stupidity. So I don't care what you make. You've still got to run the principles.

Starting point is 00:08:47 Hang on, we'll send you a copy of the book. As a dad of young kids, I'm starting to think a lot more about the world they're growing up in and how I'll help them make sense of it as they get older. And that's why I like World Watch, a video news service for pre-teens and teens. because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. World Watch's 10-minute videos help young people understand what's happening in the world through a Christian worldview without all the outrage, negativity, and noise that is everywhere these days. The reporting is factual, engaging, and designed specifically for pre-teens and teens.

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Starting point is 00:10:21 Jane is in New York City. Hi, Jane. How are you? I'm fine. Thanks, Dave. What's up? I'm 52 years old. I've been married 28 years. I have two college-age kids. And up until last year, I took care of paying the bills from my and my husband's joint account. We had no debt, no loans, no car payments.

Starting point is 00:10:44 And we had about $120,000 saved up for it was to buy a house. So last year when we would have an argument, sometimes my husband would say, maybe I should just take over the finances. And I just brushed it off like that's a weird thing to say because we never had separate accounts or anything and he had access to everything.

Starting point is 00:11:06 So in May, he tells me that he wants to spend $11,000 on day trading. And so I reluctantly said, okay. In the past, he lost money day trading as well. but I just figured that he would just get it out of his system, and if he got anything, that would be great, but it was just $11,000. So it turns out that I gave him all the finances because it was, excuse me, too stressful for me.

Starting point is 00:11:34 And through the summer, he just depleted the entire savings. So $50,000, $45,000, $30,000, whenever I would ask him about it, he would just say, I moved it to another account, and I'm not answering any questions about it. And during that time, our landlord also told us that we need to move. And so I was like, we need that money to get a house. And my mom also gave us $50,000 when she found out we needed to move.

Starting point is 00:12:02 So he says, no, we're going to stay here another year, and I'm going to day trade, and I can double this money. And so it was extremely stressful. Finally, in April, after asking him all winter, what are we going to do? What are we going to do? What are we going to do? Because I had no access to anything anymore.

Starting point is 00:12:23 I had no, I couldn't see anything. If I asked him to show me what he's doing, he said, I don't want you looking over my shoulder. So why have you tolerated this? What could I have done? Well, I mean, what do you do if your husband is doing cocaine? I don't know what I would do. Call the police.

Starting point is 00:12:43 Yeah. I mean, just telling me he's either going to go into rehab or I'm going to divorce you. Yeah, well. Because I'm not going to stand here while you ruin the whole freaking family with your moronic day trading. Well, he lost it all. I'm sure he did. 97% of day traders lose everything.

Starting point is 00:13:00 Yeah. And we still need to move, and I still have $130,000 in savings. You do? Yeah. How do you know? For my mom, he has no access to that money. Oh, okay. I still have that separate.

Starting point is 00:13:15 He can't touch that money. Yeah, that's what I would, well, that's the first thing I would do, Jane, to start separating everything. And like you did with that account, that he cannot have access anymore because the trust is completely broken and how he's handled that and how he's handled you in the process, giving you no voice in it, giving completely brushing you off, putting you to the side. That's a complete marriage breakdown. And that's that's the red flag that I see is that your marriage, that's on the rocks, right? When your husband treats you like that. And it's way more than the money problem at that point. That's a husband and wife issue.

Starting point is 00:13:51 So have you guys reached out to have any level of change or something? Or is he just completely basically ignoring you through all of this? He's ignoring me. I asked the pastor for counseling. And he said that he doesn't believe in counseling. So he went to the first counseling session. And he said to the pastor, I don't believe in any of this. I'm not going to say anything.

Starting point is 00:14:12 And he refused to talk. Yeah. Yeah. That's a hard place to go forward, right? I mean, again, beyond the money situation. Yeah. If you just change, if you just change this extreme misbehavior to a different kind of extreme misbehavior, it indicates to you what's going on and then how you're going to have to handle it. And that's going to be under the direction of your pastor, under the direction of a counselor, not under my direction. But it's going to end up in an ultimatum because you're not going to live like this. I can hear it in your voice. You're not going to put up with this a lot longer.

Starting point is 00:14:47 Yeah, she always didn't put up with you when you were like, my heart to be getting. You got fire, Jane. You got some fire in you, which is good. Well, I told him. I said, I'll pay all the debt off. And whatever it's left, I'll give a down payment for the house, but you have to stop trading. And give me control of all the money.

Starting point is 00:15:05 Yeah, I said, give me control of all the money, and you can't touch it until trust is gained. And he said no. Yeah. Then he's saying, Dr. John Delone, he says, behavior is a language. He's saying, I don't want to be married to you. That's what he's saying. Okay.

Starting point is 00:15:22 So you need to sit down with your pastor, honey, and your pastor and you need to talk about whether or not you're going to stay married in an abusive relationship because you're being abused. And it's not fair to you. You know, the way you've been treated is wrong. And it's as if he's doing cocaine and he says, oh, I'm not going to go to a counselor. I don't need help. I'm not addicted. I don't have a problem.

Starting point is 00:15:47 You have a problem. Well, you got two other. people sitting here going on the other side of this and in three and a half minutes we determined that you don't have a problem he does your only problem is him so he's either going to engage in change or you're not going to be there because i can tell listening to you you're not going to put up with it much longer and the problem is if you don't sit down and address this directly with a counselor with some help you're going to go i've worked i've done this for almost 40 years now and i've sat with couples and

Starting point is 00:16:18 And I don't know. I do not understand this. And people are going, I'm going to get criticized for saying this. But women in particular put up with crap longer and longer and longer and longer. And all of a sudden a switch flips and you're done. And no amount of nothing will get you back. We can't reel you back in. You're just done. Like the thing tipped over and Humpty Dumpty is over.

Starting point is 00:16:43 You can't put the boy back together again. And I don't want you to reach that point accidentally. if you're going to reach that point, I want you to do it intentionally. Yeah, and Jane. And with some help, honey, with some help. And I just want to circle back, though. I mean, her heart just shattered on the phone. I mean, it's a scary reality, and I don't want to be flipping about it, Jane.

Starting point is 00:17:02 I'm not flipping. No, I know you're not. I'm just saying in general because we can, I feel we can say something on the side of the desk, and then we move on to the next call about mutual funds, right? And here she is picking up this reality that maybe has not been said out loud before to her. till now. I mean, there's a reality that's going to play out for her. That's very real and very hard, Jane. And so I think reminding yourself of you're not the crazy one, you're not in the wrong, what you're asking him to do is not over the top or bizarre. Like, you are the sane one in this.

Starting point is 00:17:37 And if he cannot participate in sanity and continues to live in insanity, you can't live your life like that. And so we are here for you. I just, I don't know. I just felt for her just then. Yeah. Amen. Amen. That's so difficult, Jane. In 28 years. I mean, you just feel like your, yeah, your life just shatters and because of his behavior. And if he's changed or something's happened, I don't know if you could get to the bottom of it of what's going on. But if he refuses to change, you cannot change him.

Starting point is 00:18:08 You can't make people do stuff. No. And that's why so many addictions addicts end in divorce. I wonder if day trading, not to put day traders in the, that level, but it's some level of like, definitely. You know what I mean? It's the same, it's like the same hit of like a gambling or what that is. Like there's, there's something that I can like. Yeah. And, you know, it's like pulling the arm on the slot machine, walking up the craps table. It's the same stuff. It's setting up the same cycle. It's a feedback loop. And Easter talks about it in his book Scarcity Loop. And the Scarcity Loop talks about exactly how this

Starting point is 00:18:44 is going on, what's going on. But because when a guy is so, wrapped up in that or a person is so wrapped up in that that they can't look at their spouse of 28 years and listen. Right. That's what makes me mad for her. Yes. And but she can't and she can't make him do it. No. Nothing she can do is make him wish he had done it. That's the only thing she can do. And it's just, and protect herself. I was going to say, Jane, that, that's my number one step for you is I'm so glad you have that other account and I would be taking my name off things. And I mean, yeah, it's different, but it does always help me to go to the extreme and say, okay, if he's doing cocaine and we had the exact same set of verbiage.

Starting point is 00:19:24 Yeah. What would you do? Right. What would you do? Right. In affair of whatever it is. It's still a misbehavior. Okay.

Starting point is 00:19:31 Still, I'm screwing around and I'm messing up my whole life and I'm messing up my wife's life and my kid's life. Okay. So call it what you want to call it. But if you're doing cocaine, you sat with a pastor and he goes, I'm not going to talk. I don't believe in counseling. And I'm not going to give you any more money for drugs. Then I'm not going to talk to you.

Starting point is 00:19:46 and I'm going to shut you out. It's like, well, that's all language of an addict. Yeah. I've met plenty of people over the years who had a product that they wanted to sell, a side hustle that they wanted to start, or a business idea they couldn't stop thinking about. But they never took the first step because getting started felt complicated. Shopify makes it much easier.

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Starting point is 00:21:06 start your free trial at Shopify.com slash Ramsey. Shopify.com slash Ramsey. That's Shopify.com slash Ramsey. Nancy's in Los Angeles. Hi, Nancy. How are you? Hi, Dave. Thank you for keeping my call. I really appreciate your advice. Sure.

Starting point is 00:21:40 Yeah, my fiancé, he's 71 years old and I'm 56. We're getting married in the Catholic Church in October. He wants a pre-nep. don't. Um, he's retired, uh, has two million saved and a house paid off. The house is worth $700,000 dollars. I'm still working. I have $600,000. Neither of us have debt.

Starting point is 00:22:06 He lives in San Francisco. I'm in Los Angeles. Um, you know, I, I, I don't, I want, I just want to walk to the altar with him and marry our lives together. And, um, I just, I would like your advice because, um, um, I just, I would like your advice because, um, um, You know, I want to build a life with him, and I think for me to leave my home, my security, my job, and be a visitor in his home, with a pre-nup. You know, it doesn't feel like a marriage to me. What's your home worth?

Starting point is 00:22:44 No, I'm in an apartment. I live in Los Angeles. Oh, okay. All right. So you don't, you mean you just leave your, okay, you're not leaving a home that you own. So you have $600,000 saved, and you make what at your job? $60,000 a year. Okay.

Starting point is 00:23:03 And he's retired. He's not working. He's 71 and you're 56. 71. I'm 56. Yeah. Okay. Okay.

Starting point is 00:23:15 What would make you comfortable in the pre-nup other than all or nothing? You're assuming he wants all or nothing. right? Yeah, he's just nervous because he's 71 and wants to protect. And I said, listen, I want to go. Catholic is forever, you know, when you get married in the church, we don't prepare for divorce. And I don't want to prepare for divorce because that's creating that situation and that kind of fear walking down the aisle together.

Starting point is 00:23:50 And he's worried about his investment. and losing half of what he's, you know, moved because we can't go back to work, right? So, you know, we both love each other fiercely. And this is... Yeah, we don't recommend pre-nups except where there's extreme differences in net worth, and this is an extreme difference in a net worth. And so I don't know why it represents... I understand Catholicism, and I understand

Starting point is 00:24:25 marriage is forever and I don't I don't have a problem with that and I understand that you are somewhat vulnerable if you leave your job and then he decided he wanted to put you out and keep his 2.7 and you had your 600 and you had to start over at 58 years old two years from now that's not fair to you but the pre-nup could say that you got 500,000 but just not half of 2.7 and also I'm leaving Los Angeles, my home, my family, my work, my whole community. You're leaving a $60,000 job and an apartment in Los Angeles, so financially you're not leaving anything. I'm sorry?

Starting point is 00:25:10 Which doesn't really exist up there. I'm sorry. Say one more time. You're muffled on that. Work in the entertainment industry also, which doesn't really exist up there where he's at. Okay. That's fine. So you're giving up a $60,000 job to move in with a multimillionaire and be married to him. And if you get a divorce, you would want something to start your life over with to offset that $60,000. And I just said, you know, the pre-nup could say a half a million dollars of his money goes to you. At that point, you'd have $1.1 million and looking for a job, I think you could survive. I'm not suggesting that that's going to happen.

Starting point is 00:25:57 In this situation, statistically, it's much more likely that he dies than you get divorced. Agreed? Yeah, I never see it's getting divorced. Yeah, I mean, I don't see you getting divorced either, but I'm just saying, so what happens to his money when he dies in your mind? Does he have grown kids? Oh, neither of us have children. Yeah, this is, the pre-nup is just for...

Starting point is 00:26:28 I know, I'm asking you, what have the discussion been? What happens to his money when he dies? We haven't discussed that, but I'm sure... That would be something to know. That's much more likely to happen than divorce. I'd really want to know that. Right, right. I'm sure I would go to whichever spouse is alive at the time.

Starting point is 00:26:47 I'm not sure. He wants a pre-nup. Right. So let me just tell you. I'm just going to, I'm just being cold and calculated, not romantic, okay? Because you called to ask about this. You called Dave. So we'll let Rachel do the romance, okay?

Starting point is 00:27:06 But I'm too old for that. But the deal is he's 71, you're 56. I'm going to give you a 90% probability he dies before you or before you got divorced. In that case, there's a 90% chance you should be a lot more worried about what happens to this money on death, and you haven't even discussed that. Right. I mean, we discussed a living trust, and I guess that's where that would take effect. Yeah, but a living trust can have a different beneficiary.

Starting point is 00:27:39 Does all the money come to you at death? If it does, that changes the discussion on the pre-nup a little bit. But I don't, to answer your question overall, I don't think it's un-Catholic. I don't think it's lacking in commitment. when there's an extreme difference in asset base to get a pre-nup. If you were two 22-year-olds that were broke and he wanted a pre-nup for his collection of Pokemon cards, I would tell you not marry him, okay, because he's not committed to the thing.

Starting point is 00:28:12 But you're not too broke 22-year-olds. The guy has $3 million, $3 million almost. You've got almost a million dollars, and you're two grown-ups, to say the least. and so yeah it would be normal to get a pre-up in your situation yeah i don't think what he's asking for is completely unreasonable but it would also be normal to offset your question that in the event of a divorce you did get something substantial of his to offset what you gave up in los angeles that's right that's right absolutely yeah and i think and it feels like 20 30 years ago the automatic knee-jerk reaction to a pre-up is, oh gosh, I'm preparing for divorce. I'm preparing for

Starting point is 00:28:54 divorce. And as we've just talked about this is right, as times going on, they're becoming more and more common and probably out of the out of some wisdom, maybe not all by any means, but in some situations, the wisdom minute of planning for him, because if I'm in his seat and I've built this and I'm not able to go back to work and something happens and half my net worth is gone and the thought of me having to go figure out how to continue to live my life. You know what I mean? Like there's a, that makes sense to me. Like that on his end too.

Starting point is 00:29:24 But I, I, your knee-jerk reaction, Nancy, of that, I hear that a lot. And I think that's fair. I felt that for a while. But I don't think it's necessarily means that. In fairness, when we came on the air 30 years ago, we told people don't get a pre-nup. If you can't, if you can't combine your stuff, they're not worth marrying. Forget it. And we were just hardcore about it.

Starting point is 00:29:42 But the more we went along, the more we found in coaching people that the problems that happened that a pre-nup does away with are more to do when there's an extreme difference in that worth. So, like, I had a lady for real call up one time, her fiancee wanted a pre-nup to protect his sports car. And I'm like, he loves a car more, he loves you, don't marry him. He's a twerp. And so he doesn't need a pre-nup. He needs a dog. And so, you know, that's different, right? But that's, but, you know, if you got 10 million bucks and the other person's got zero. The other thing the pre-up does is it keeps the weirdness out of the extended family. Because the extended family is like, oh, she married a multimillionaire. And here comes, you know,

Starting point is 00:30:27 cousin George. Cousin Eddie rolls up in the RV, right? And, you know, he wants to talk to the new hubby about his new plan. Yeah. I want to open a pizza plan. Yeah. I want to open a pizza place with hubby's money. And you're like, all that stuff goes away because you just go, I can't do anything. I got a pre-nup. And it helps you deal with extension. ended family that's nuts. And him too, for that matter. He keeps them from thinking you're a gold digger. And, you know, so where there's an extreme difference, we are good with his suggestion, but I do think you make a valid point that in the event of a divorce, the very unlikely event, that you get something. If you're waiting for the perfect interest rate before you buy a home

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Starting point is 00:32:14 NMLSID 1591. NMLS ConsumerExS.org, Equal Housing Lender. 1749, Mallory Lane, Sweet 100, Brent Went into C, 37227. Grant is in Miami. Hi, Grant. How are you? Hey, Dave. Hi, Rachel. How are you guys? Little north of that in Fort Lauderdale. But I am 24 years old. I'm making about $150,000 a year. I have a high-ield savings account set up with about $40,000 in it. But, you know, maxing on my 401K. I'm maxing out my Roth IRA as well. Moved down here about 18 months ago from Arizona, so buying a boat who's been in our mind.

Starting point is 00:32:56 And I think I'm going to pull the trigger on it to take about 16 out of that $40,000 in my a high-old savings account and purchase a boat. Guess I'm just calling, right? Trying to figure out, you know, I need someone to tell me it's a good idea. Just kind of thoughts and opinions. I believe it's okay, right? I'm going to start rebuilding that, you know, high-old savings account right back up.

Starting point is 00:33:19 Again, I'm maxing with my 401k and my rough hour rate. And you're debt-free, except your home? No credit cards. I'm renting right now. No credit cards. No student loans, nothing. Don't tell you something to my money every month is my rent. No car payment.

Starting point is 00:33:37 Okay. So you have no debt. You have no debt. Are you there? Yes, sir. Okay. Just making sure. You're saying that out loud.

Starting point is 00:33:46 You have no debt. Okay. And you make 140. Yeah. Okay. And you're 28 years old and you have 40,000 and you want to use 16 of that to buy a boat. 24 years old. Oh, I'm sorry.

Starting point is 00:34:00 And you want 16 of that to buy a boat. Okay. Yes, sir. Well, the rule of thumb that I use and that we've taught for years, and it works pretty well, most people, Grant, make the mistake of spending money, lots of money, too high a percentage of their net worth, too high a percentage of their life on things that go down in value and then wonder why they're broke. Now, I love boats. I've got two master crafts.

Starting point is 00:34:27 I was playing on them all weekend, throwing the grandkids around on tubes mercilessly. Okay, so I'm a boat guy, a lake guy, I'm with you, all right? And boats and cars and motorcycles and lawnmowers and sea doos, anything with an engine or wheels or a battery goes down in value. And if we have too much of our life tied up and things that go down in value, we're always going to be broken and wonder why. And we call that middle class. because middle class has a car sitting out front of the house. It costs almost as much as a stupid house and then wonder why they're broke. Okay?

Starting point is 00:35:10 That's where that comes from. Rich people don't put money and things that go down in value. That's how they got rich. So all that to say, the rule we came up with was no more than half your annual income in things that have wheels, batteries, or motors. And that includes boats and cars. So what's your car worth? The 2008 four-runner More than 10 less than 15

Starting point is 00:35:36 Okay And you're going to spend more on a boat Than you spend on your car's worth You have 30,000 tied up You make 140 It meets the guideline You're not putting too much into the boat The boat is fine

Starting point is 00:35:48 But that that speech goes with it That you have to use that mentality Not just go, I think it's okay to buy a boat Because that's what people say And you're not going to borrow money and it's not going to be more than half your annual income and stuff that has wheels and motors. So you're fine to buy the boat. What kind of boat are you looking at for $16,000?

Starting point is 00:36:08 It's a fantastic deal. It's a 180 hurricane. Okay. It's ocean boats. You're a lake boat. Yeah, it is. Yes, so I'm from Arizona. So it's a whole new ballpark for me, right?

Starting point is 00:36:20 Lake boats. So saltwater, but it's a great deal. Go on for 20 to 18, and I said 16. and they agreed to it. I put my heart out there. I'm a first-time boat owner. It's a single engine. It's, you know, it's going to be my first time,

Starting point is 00:36:37 so they agreed to 16. So you're tailoring this boat with a forerunner? No, sir. Oh, okay. I live on the arena. I'll have a slip here. This is another thing which I'm worried about. I don't like monthly expenses.

Starting point is 00:36:51 I don't. You're getting ready to have one. Yep, in terms of the boat slip, right? Which is going to be $450 a month, which freaks me out. Yeah. Good. I tell my girlfriend, and she's like, man, you're making $150,

Starting point is 00:37:04 and I don't spend anything. I tell everybody, I'd rather look at money in my account than look at a car or look at anything. Well, you're getting ready to have way more tied up in the boat than you're having a car, and you're using the car every day, and you're using the boat occasionally. And so let me tell you what not to do with the boat. Let me tell you what not to do. This will make you throw up.

Starting point is 00:37:24 Don't ever figure out how many hours you spend on the boat and divide that into what it costs you because it'll make you throw up. It'll be thousands of dollars an hour. Yeah. That's what you're going to end up spending. But that's part of owning a boat. Yeah.

Starting point is 00:37:43 I got the MasterCraft this weekend. I looked down. It's got 120 hours on it. Yeah, but he said, well, yeah, and his is a 16,000. And he said he works from home in the place, you know, he may not his boat a lot. I'm not saying that.

Starting point is 00:37:55 I'm just saying, you know, There's a whole lot of stuff in this that's giving me pause, okay? I'm 24 and it's the best deal on the planet. Both of those things scare me, okay? But I think still, I think you ought to go by the boat. I think you ought to have the experience. I think you're fine. You got to do it.

Starting point is 00:38:09 It's not going to break you. I think you've overthought it to. He's very... It's not 160,000. Go enjoy it. Yes. Yes. You're fine.

Starting point is 00:38:15 You are fine. Go enjoy it. And I think you're probably... A guy that asks this many questions about something like this is probably going to be okay. It's the ones that go, I just took out a $480-dollar boat payment for the $450 payment for the $450 slip and I drive a $4 car. That's the ones that kill me. Okay.

Starting point is 00:38:32 So, yeah, and we get those all the time too. So, Grant, I think this is in the guidelines of wisdom, but in the middle of all that, we have to give you all of our speeches. Yep. Well done, Grant. Well done. David's in San Antonio. Hey, David, what's up?

Starting point is 00:38:49 Hey, thanks for taking my call. Sure. I have kind of a unique situation. I'm 74 years old. Never married, no kids. Lived in the same house for 45 years. No debt, absolutely no debt. A couple hundred thousand in savings and a couple luxury cars and whatnot.

Starting point is 00:39:09 But my neighbor, who owns the lot next to me, says, Dave, you know, I don't want to hurt your feelings, but we want to buy your house. And you can live in the house for the rest of your life, but we're willing to come up with a, cash some and give it to you and and I said well let me think about it whatever went to my family members and then I realized you're the ace in the hole okay you know so I don't know what to do you know I know when I die I'm going to be separated from the house and my neighbor's a good neighbor you know yeah you could sell it to him with a life estate which is what he's proposing I probably wouldn't do that you're you're still probably I mean you could live 20 years even easy and 20 years from now things change a lot.

Starting point is 00:40:01 So what I would do is say, tell the neighbor that for now, I'm going to put in my will instructions for the house to be sold to you for market value by the executor of the estate and that then the proceeds will be distributed to my kids. I don't have any kids. I thought you said you went to your family. Oh, family members, you said. Who are you leaving your money to? My brother, I have nobody to leave my money, too.

Starting point is 00:40:31 You don't have a will, do you? No, I do not. You need to get a will tomorrow, if not today. Really? Everyone needs a will. Yeah, and in the will, you could leave instructions. The executor of the will is the one that executes the terms of the will. And when you name that person, it could be your brother.

Starting point is 00:40:53 You can say, I want this money. I want this house to be something. old to the next door neighbor for market value by having appraisal done. Market value of like today? At that time. No, at the time. At the time. Yeah, at the time.

Starting point is 00:41:04 He can buy it at the time for market value. I'm not going to sell it today. Because I think they want. They want to lock in the price. That's right. Yeah. No, thank you. Well, could he like as a gift to it.

Starting point is 00:41:14 You could leave it to the neighbor at that price. You could do anything you want. It's your will. Yeah. Yeah. But yeah, you could say, put a number on it today. I want to sell for this many hundred thousand, whatever it's worth. today. But I still went, yeah, but I don't want to sell it because I want that I want the house

Starting point is 00:41:28 in my name still and all of that. Yeah, and I can change my will later. Yeah. If something weird happens. Yeah. Yeah. If the neighbor decides to go off, you know, go crazy over there or, you know, they die. What happens if the neighbor dies first? Mm-hmm. You know, I don't, I don't need the house in their, in their kid's name, and I've got a life estate. So there's too much it can happen over those years to a non-family member situation. to do a life estate. I wouldn't do a life estate, but I would do a will immediately. Yeah, go to mom and bearlegalforms.com, David, and you can just do a state-specific will there. It's pretty simple, but your family will, your brother will thank you.

Starting point is 00:42:10 Every one will will will will. You leave a mess behind if you don't have a will. Well done, though, David. Debt-free and all. If you're planning a summer trip, you're probably spending a lot of time getting everything ready because responsible people prepare for things that matter. And travel has a way of reminding us life can change fast. That's why I recommend Mama Bear legal forms. See, a lot of people put off getting a will because they think it's complicated, expensive, or they'll have to sit in a lawyer's office for hours.

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Starting point is 00:43:28 Use the promo code Ramsey and save 20%. That's mamabearlegalforms.com. promo code Ramsey. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio. I'm Dave Ramsey, Rachel Cruz, Ramsey personality. My daughter is my co-host today. Mary is in Raleigh, North Carolina. Hi, Mary, how are you?

Starting point is 00:43:59 Hi, I'm good. How are you? Better than I deserve. What's up? So I am really good with money. I would like to think. I work for a nonprofit. I make enough money to get by.

Starting point is 00:44:10 And I am fully out of debt. and I'm very careful with how I spend my money. However, I've been having some health problems, and a doctor sent me to get an MRI and did not explain to me how expensive it would be. I have a bill for $3,10028.56. It is very far outside of my budget, obviously, and I've been trying really hard for years

Starting point is 00:44:37 to save up enough money to get a decent used car, and this would set me back a lot, and this is not the first medical bill to set me back. This is just the biggest one. So I've been told to either, you know, some people are saying to get on a payment plan, but I hate being in debt, and even if I get on one, it's going to drag out for a very long time. How much do you have the money, technically? I have a little over $13,000 right now on savings. Okay.

Starting point is 00:45:06 Why did insurance not cover your MRI that your doctor request? requested. Surprisingly, that is the bill after insurance covered quite a bit, and I have a decent insurance policy. No, you don't. And you don't have a decent doctor either, because an MRI, and you can buy an MRI in the open market if you just walk in with cash for $350. And not $3,000 after insurance paid. MRIs are not $10,000. So I'm really curious why your insurance company and this MRI place have screwed this up so badly.

Starting point is 00:45:50 There should be nowhere near this level of bill. Was it only an MRI? Is that all that was done? Yes. There is one MRI that was done without die and one that was done with die. They were both done at the same time and the same day, and I was in and out in 40 minutes. Yeah, it's super strange. Yeah, it says typical ranges is often $100 to $1,000 out of pocket, depending on your deductible.

Starting point is 00:46:14 We advertise for companies on local radio stations is $350.50. Usually without insurance, cash pay is $400 to $2,500. I'm sorry, $2,500. Yeah. But $3,000 after insurance, yeah. No, something's wrong. Okay. So the first thing I want to do is I want to call my doctor's office and be nice until I don't be nice.

Starting point is 00:46:38 We're going to start with nice, but we may not end with nice because they need to call this MRI place and they need to get your insurance straightened out because they don't need to send you over there and get your head taken off and get you ripped off. Acting like they don't care because they don't care. Stinking medical people. And so, man, just makes me mad. So after you finish wearing everybody in this story out, I want you to wear them out. I want you to give them $3,000 worth of hell. Okay, starting with nice, but ending up with $3,000 where the hell. The doctor, the insurance company, the MRI place, and everybody else.

Starting point is 00:47:18 Because this is absurd. I agree. Then if you have to come out of pocket with more than $500, I'm changing doctors, and I'm probably changing insurance. And I'm never going to go back in that MRI place again, and I'm going to post online how bad a rip-off they are. I'm serious. If I'm going to get screwed, I'm going to have some fun with it.

Starting point is 00:47:43 Well, and also, they, insurance billing all of it is notorious of either over-parent, yes, screwing up something. Yeah. So, I mean, and I hate to say it. I hate that we have to be such advocates for ourselves and this stuff. But call and call and have them check and they're going to send you to this person. I mean, it's going to be a pain, Mary. But a lot of people, I mean, we find it all the time that there are so many errors and stuff. It takes you three hours and you save three thousand.

Starting point is 00:48:08 $1,000, you made $1,000 an hour. Yeah. So wear them out, girl. Have you, though, Mary? Have you called? Yes. And what? Yeah, I've called every office.

Starting point is 00:48:19 I've called the doctor. I've called the MRI place, and I've called my insurance. And they all said that it was processed correctly. It was coded correctly. If they recoded it, it would be insurance fraud. Bull crap. My next question is, do I, I agree. But do I show up in person with printed documents?

Starting point is 00:48:38 and ask them to explain it to me. I'm not sure what to do next. Yeah. It just depends on how much you want to fight it. But they are ripping you off. For a cash MRI, they're charging you 10x what they should. Yeah. Okay.

Starting point is 00:49:00 And if you've got two of them in 40 minutes, we can count that as one, and we can count it as two, in which case, $700. So I'm going to call and tell the office administrator, y'all are screwing me and I'm getting ready to go to town on social media and wear you people out. I'm going to make a hobby out of you. Have you heard of Instagram? Have you heard of next door? Yeah, but threatening them. They're not going to. I'm dead serious. Oh, it will. Yes, it will. No, I don't think it will, Mary. So I'm going to have some fun with it. If I got to write a $3,000 check, I'm having some fun with it. I'm going to bust her child. Some of us don't have the energy. I know. If you don't want to do it, write the check.

Starting point is 00:49:37 So Mary. Mary. I'm not. But no, you don't put it on payments. Write the check. Write the check. Write the check. But I would, yeah, I mean, I definitely stick up for yourself. And it's just a thing going forward of like, what am I going to pay out of pocket? What is this?

Starting point is 00:49:50 Let me go shop around and see what I can find. Right. I mean, that's part of, I mean, that's how I feel with health. I mean, you got to advocate for yourself. But there is a point that the price is the price. Whether they're screwing you or not, it is what it is. And so, yeah. So you may have to just pay it, Mary.

Starting point is 00:50:06 But I'm going to let my doctor's office know, too. I no longer trust you people. Well, that and if this is going to be an ongoing thing with your medical issues, then yes, I would for sure become more informed with third party, other places that can do this type of thing. Ask around, right, just so that you have more information next time something like this comes up. Because it is scary. If someone's like, you need to go do this and this, I get it. But an MRI ordered by your primary physician should be covered by your insurance policy.

Starting point is 00:50:36 I mean, if you have decent insurance. Yeah. You're buying a back alley or something. But I mean, if you got decent insurance, MRI ordered by your primary should be covered. Now, it might fall under deductible. Right. That's possible. Yeah, yeah, yeah.

Starting point is 00:50:50 But even then, and still, they overcharged. So this is a cash MRI purchase. What's the price? You know what? You could just call up anonymously and just go, hey, I'm shopping around for MRIs. Call that place and go, what do you charge if I walk in off the street for cash? And then call and tell them you're going to hand that recording over to your attorney. Yeah. Oh my God. These people. It's just a rip-off. It's an absolute rip-off. Stephen is in Charlotte, but I'm not going to get to Stephen because I'm heading up on a commercial print. I'm just trying to move on. God, because it pisses me off. I know it does. Some of us, we don't got that mental capacity.

Starting point is 00:51:26 We used to have the healing arts and now we have the medical industry. The what? We used to have the healing arts and now we have the medical industry. And I'm the freaking widget. I don't want to be your. widget. And not everybody, not all medical, not that everyone is doing. No, no, no, no, but the system is set up that way. There's a hard, it's a tough, yes. It's set up that way. The insurance companies are it's a, yeah, now the insurance that's the, yeah, I'll get on your conspiracy theory thing on this. Yes, next segment, stick around. Health insurance is confusing on purpose. You call one company, get transferred three times, sit on hold for 45 minutes, and end up more confused than when you started. That's why I recommend health trust financial. They're health insurance advisors who actually get to know your situation and help you find the right coverage for your life and your budget.

Starting point is 00:52:56 Healthcare needs change as your life changes. Maybe it's a job change, the birth of a child, a new diagnosis, or you're just trying to have more margin at the end of the month. No matter your situation, health trust financial shops most. multiple top-rated insurance carriers and helps you understand what you're actually buying. I've trusted Health Trust Financial for over 20 years because they help Ramsey fans make smart health care decisions. Go to health trustfinancial.com today and talk to a real person without pressure or confusion. That's health trustfinancial.com.

Starting point is 00:53:39 So here's a good plan on your medical. Assume that no one has your back, and that'll be a good start for you. Assuming the opposite sets you up for unexpected bills and rip-offs. So we have sat down with people to do coaching for the last 30 or 40 years that have a list of medical bills as long as you're arm and they're considering bankruptcy. And as we do a full audit on the medical bills, we often find the same charge three and four and even five times. And then we remove all of those. And then we go in and we find Tylenol at $64 a pill and a hospital bill.

Starting point is 00:55:01 We actually see these numbers, okay? And there are a few people out there that have a neat side hustle that all they do is audit people's medical bills for them and make a portion of what they save them because they discover the overcharges and the duplicate charges. So don't just assume that these people have their act together. Some of it is with malice, but most of it is just unbridled incompetence.

Starting point is 00:55:31 The people doing the billing are dumber than a rock. No, I'm telling you, there's no excuse for this level of incompetence. There's no excuse, and it's industry-wide. I agree. You open a medical bill automatically assume it's wrong. But it's just like any other industry, a mechanic can screw you or they're a great guy, right? There's a few great guys. There are not 100%, but there's so many.

Starting point is 00:55:56 There's so many bad that don't know what they're doing or that have malice that you cannot just assume it's all, oh, they sent the bill, I just have to pay it. No, you don't. First and foremost, you got to audit it. Before you get to that point, you don't ever enter a procedure without understanding what your out-of-pocket liability is after insurance is paid. And if you're going to be covering an MRI, 350 is the going rate. Walk up and tell them, I'm cash out of pocket, and they'll do 350 or go to a different MRI center. There's MRI centers on every corner. They're like Baptist churches. They're everywhere. See, they're not hard to find. And, you know, don't automatically assume that if your dentist tells you need $25,000 worth of work, that that's gospel.

Starting point is 00:56:51 Okay? It's not a biblical reference. It's a dentist. The odd all dentists are bad, but go get a second opinion. Go get a third opinion. Go ask the question, what can I do? That's not 25,000, where I can still chew food. And, you know, figure out, you know, you have to learn about this stuff when you're in it or it will bankrupt you.

Starting point is 00:57:15 The number one cause of personal bankruptcy is medical. Number one cause. And it's all related back to this. stuff where you don't check out what you're doing and the doctor's office half but pays attention. They just send you over to the same old place they've always sent you to. Nobody looks at it until you look up in 3,000 of your 13,000 you had to say for a car is gone. That's a lot percentage wise. And it should have been 350 bucks if anybody in the whole story had paid attention ahead of time or cared enough to take care of this poor woman.

Starting point is 00:57:52 It's her. It's your job to care for her. And when you don't, you deserve to lose the business. And I'm going to another doctor. And I'm definitely never going back in that MRI center. And I'm about to possibly change insurance over this because you're going to stink and do what the contract says. And when I come out of there with a bill that's 10x higher than I could have paid in cash and that's after insurance, something's wrong. Yeah. So 100% chance something's wrong. and but here's the thing folks the lesson you take from that call is you've got to preset all of this before the procedure so you know what's going on the only exception is

Starting point is 00:58:31 when there's an emergency and you don't have a choice yeah that's a hard thing too sometimes something happens medically and you just got to do what you got to do to yeah and then you still got to go back through and audit it yeah because you cannot assume competency because they're not it's the I mean if any of those accounting people work for me, I'd fire on. No, okay. And I know, I just, yes, I hear you, I hear you. We don't triple bill people out of Ramsey.

Starting point is 00:58:56 I have friends who are, I have friends in that industry. And there is a level of, and I wouldn't say incompetence, but complication. If they enter this, it goes to this. I mean, it's a lot of stuff, moving parts. And do they all get it right all the time? No. And sometimes it's such a confusing process. And then you go send it to the insurance companies who, I mean, it all.

Starting point is 00:59:17 It's all just medical. It might be confusing to you. me, but it's like their job. It is. It's their job. So they need to learn to do their job. That's competency. Yeah, but when it gets sent to a different department, they use a different code.

Starting point is 00:59:30 That's what I'm saying. That department needs to be competent. I know. I just feel like. I'm not saying the nurse did it. I don't know who did it. But whoever ended up sending me this bill, this triple bill, somebody's an idiot. Somewhere in the chain, there's an idiot chain.

Starting point is 00:59:43 Okay. We got it. So it's there. Okay. All right. Tammy is in Houston. Speaking of medical. Well, she's got a medical situation.

Starting point is 00:59:50 What's going on, Tammy? I would say, is there blood pressure too high? I'll protect you, Tammy. Can you imagine how bad it would be if it was actually my bill? Okay, here it is. How can I pay for brain surgery if I'm broke? Whoa! That's a little step.

Starting point is 01:00:16 So do you have insurance? Yes. I have a little HMO plan that's terrible, but we got it. Okay. And what type of brain surgery? Bless your heart. I'm an epileptic, and I have taken 17 different medications, and I've had four different brain surgeries, and now they're just going to go in and cut out the part of my brain that just will not stop. Wow. Oh, my gosh. Have, well, to talk about what we were just talking about on this, last call. Have you, do you know what you're going to after insurance and everything? Do you know what is going to cost? My out-of-pocket max is 17,000. And then anything else or it's covered past

Starting point is 01:01:04 that? I think so. If that's the out-of-pocket max, it should be 100. Okay. It should be 100% after out-pocket max. So you got 17,000. That's not a bad HMO. That's a great one. Oh, good. If it's covered, if you, if you have a stop loss at 7,000. 17K. That's pretty stinking cool. Okay. So you got deductible plus 80, 20 to a certain point, and then, wow, that's good. All right. So how old are you, hon? I'm 42. Wow. When do you think you're going to have this procedure? It's one of those as soon as possible. Like I said, last year in 2025, I probably had 200 seizures. Do you have any idea actually when the surgery might be skin? scheduled.

Starting point is 01:01:55 Whenever we can figure it out. So my husband lost the job about a year and a half ago. And our Dave Gransy Emergency Fund lasted us a whole year. Me and my husband and our four teenagers, we've been doing awesome. But we're just broke. Has he found another job? He wanted to own his own business. He's been working on that.

Starting point is 01:02:20 And then he didn't earn enough. Then he went and got another job in sales. But he was taking over for a guy that was retired, and so for six months the guy got it, and then after that, all the accounts were cold. So he's trying, he's like working three different jobs, but it just is taking a while. Yeah. Well, it sounds like you don't have a $17,000 problem. It sounds like you have a career crisis on your husband's side. Yeah.

Starting point is 01:02:46 Yeah, so when he solves that, the $17,000 is going to naturally be solved, right? Yeah, so do I do you? Yeah. Oh, yeah. Yeah. You start, you have the surgery whenever and you get them to 17 as quick as you can. They'll take, you know, they'll bill you and then you pay the bill when you can. I'm not going to tell you not to get the surgery.

Starting point is 01:03:05 But, yeah, but he needs, he's got not only because of your surgery, but because of your family. I mean, it's over a year now. He's not had gainful employment. He needs gainful employment, meaning he gets paid, not a pipe dream. Yeah. And then the goal would be maybe throw 2,000 at this a month. month and get paid off in less than a year, right, when it all happens. Exactly.

Starting point is 01:03:28 Oh, sorry, Tammy. Oh, we pray for you. You're getting ready to hit the road this summer. You want to feel confident your car is ready to go. But when you don't fully understand what's going on under the hood, it's easier to either ignore something important or spend money you didn't need to. Because let's be honest, you're not a mechanic. And you shouldn't have to be.

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Starting point is 01:04:47 That's CBAC.com slash Ramsey. 10% off, up to a $250 value. See store for details. Steven is in Charlotte. Hi, Stephen. How are you? I'm good. How are you?

Starting point is 01:05:15 Better than I deserve. What's up? So I am about $70,000 in debt, and I just don't know how to get out of it. What kind of debt is it? What kind of debt, credit card debt and medical debt? How much is credit card? I have it broken down. Amex is 4,300, and Capital One is 6,800.

Starting point is 01:05:45 And then I owe on my car. $25,000. I have some of the debt enrolled in a debt consolidation program. It's been enrolled for about a year and a half, but I'm just not seeing anything go away. Yeah. And I've got stuff that's on hold. That's not anywhere. What's the medical debt?

Starting point is 01:06:04 How much? So I don't have the whole total, but I have $1,800, $3,700, $3,700, $500, $600, $600, $600, $400, $400,000. 4,4,2,2,2,3,600. Oh, wow. Okay. How much do you make a year? Are they anything? I make about $2,200 a month.

Starting point is 01:06:32 I found myself in the situation because I lost my job January of 2024 because of my own stupidity. I stole from my employer. So, you know, I was fired. I was arrested and everything's just gone downhill since then. Okay. What were you doing? I was working for a furniture store. Doing what?

Starting point is 01:06:55 Inventory management. Okay. I was making about $53,000 then. And then everything was fine. All my bills were paid. I had no debt. What's the nature of your medical? I had to go under anesthesia twice within a year.

Starting point is 01:07:18 just because I was choking. I don't even know what the condition is called, something I can't pronounce, but I had to go into an anesthesia and in order to not be choking anymore. And they did a surgery, obviously, while you're under, but you're saying the bill was mostly the anesthesia.

Starting point is 01:07:40 Okay. Yes. I got you. What are you doing now for work? I work for a grocery store. Okay. And how many hours a week are you working? It's 40 hours. Okay. Full time.

Starting point is 01:07:53 Were you convicted of a felony? It was dismissed. It was dismissed? Yes. Because I did a pretrial intervention program. Okay, so expunged, okay. Expunged. All right, all right. So that's not holding you back because it's not on your record at all. No, correct. That's not on my record. Okay. And that took a back. took an entire year. Yeah, I bet.

Starting point is 01:08:25 So you're six months kind of out of all of that fog, really. Yeah. Yeah. And I have a license to sell real estate, and I'm with the brokerage, but it's hard. I'm a new agent, and so it's just hard. I can't make any money in it. So that's why I'm still at the grocery store. And I've got only $300.

Starting point is 01:08:50 savings, so I've got nothing. I, you know, when all this happened, I dreamed my 401k and any of the savings. I was putting everything on credit card. What is your car worth? The car worth, it's a Toyota that it's probably worth 37 or 38. And you owe 25? I owe 25 on it. How are you paying that bill with all this other stuff going on?

Starting point is 01:09:15 I make it work. Yeah, that car needs to be selling. Yeah, sell that car. I work, sell the car. And buy a car for cash with a difference. For sure. You can buy an $8,000 car. Yeah.

Starting point is 01:09:31 Because how much is your payment a month? $400. $5.43. Yeah. So that frees that up. That changes your life. It was 7 something because it was a lease. And then the lease came due to an end, I think, just this past April.

Starting point is 01:09:46 Okay. Matthew, you make $20,000 a year or $30,000 a year. you don't need a $25,000 car debt. It's killing you. So you need to sell it and get an $8,000 car that you pay cash for. And then the rest of your situation is all career-oriented. And so it's a matter of lining yourself up with some kind of a career, whether it's real estate or whether it's something else, I don't care, where your income goes up.

Starting point is 01:10:10 Because you're worth twice what you're being paid in the marketplace. You have proven that in the past. And, you know, you made them a... mistake, you paid for it, you went through all the hell associated with it, you lost your job, and now you get a restart. And you start with, that's going to be part of your story in the past, but it doesn't, as a pastor friend of mine says, you're not defined by the worst thing you ever did. You're not defined by the worst thing you ever did.

Starting point is 01:10:40 Thank goodness none of us are. It's a part of my story. I have a scar. I have a mark. It hurt. I feel guilt. I feel some shame from it, but it's not who I am. You see the difference?

Starting point is 01:10:58 I do. Yeah. And so you've got to get that part emotionally, spiritually, in your rear of your mirror, and then go, okay, I'm 18 years old again, and the world says I can be anything I want to be. So now what do I want to be, Lord? And what's my next step? And yeah, and that could be real estate. I don't care. But there's no, you don't have to live in.

Starting point is 01:11:21 the prison of working for half of what you're worth in the marketplace because of a past mistake. That's a self-made prison. And I was working seven days a week. I've always valeting cars. I was making some good money with that. But, I mean, I was just... No, you weren't. You were valeting cars.

Starting point is 01:11:40 That's not a career. That was a second. That was a side job I had. Yeah, it was making some money to keep the wolf away. A money. But it's not, that's not your, you don't want to be that 10 years from today. Mm-hmm. So 10 years from today, who do you want to be?

Starting point is 01:11:53 Now, let's start taking the steps to be that. And we'll work the side hustles or whatever to get there. But if we work side hustle valet and cars while we're trying to get the real estate thing going, because the real estate thing's the thing, fine. But if the real estate thing was just a thing and it's not the thing, then what is it you want to be when you grow up, you know, kind of thing, right? So we're going to send you a copy of finding the work you're wired to do. It's got an assessment in it.

Starting point is 01:12:20 I want you to take that. I want you to sit and do some time in prayer about what you're supposed to be 10 years from now and get the car sold. Great first step. Seriously. Selling the car, I'm like, that's from a financial perspective is going to relieve you so much. But also, yeah, for sure. And I think, you know, there is a freshness still 18 months after all of this for you, Stephen, that's very, very real and very honest. But I do think the more confidence and the more wins you have all in the marketplace,

Starting point is 01:12:57 the more that you're going to find this level of dignity back to who you are. And yeah, and if you can find that intersection with your work of what you're passionate about, what you're naturally good at and gifted at, like all of that combined, this could be seen as a completely fresh start, which is beautiful. That's the beautiful part about redemption. Yeah. And grace is that you get that second chance. So we, yeah, we're cheering for you for that.

Starting point is 01:13:24 Yeah, I got a friend of mine who was in the bottle for about 15 years, and he just got his 15-year coin the other day. If you don't know what that is, if you're in 12-step, Alcoholics Anonymous or any kind of a program, you get a coin for so many days, so many months, whatever. And he just got his, he's been dry for 15 years. And, you know, he's extremely successful today. but he was truly at the bottom and just virtually homeless, virtually lost his family, everything completely turned this all around and changed everything, changed everything. And now he's, again, but he, you know, he is not defined by what he used to do or used to be. He's defined, not defined by it.

Starting point is 01:14:12 You're not defined by that unless you choose to be defined. I'm not defined by the fact that I was stupid, went deeply into debt and filed. bankruptcy when I was 28 years old. I learned from it. It hurt. I don't want to do it again. I don't recommend it to anybody, but it's not who I am. It's just part of my story. Let me tell you what I get asked all the time. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent, on your income, you need to have 10 to 12 times your income in life insurance. Now, and most people

Starting point is 01:15:21 are surprised by how affordable term life really is. Even if you're not in perfect health, look, I understand the hesitation, since most insurance companies make it more of a hassle than it needs to be. Not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates, and coverage that actually protects your family. Call 800-356-4282 or go to Zander.com for a quick and easy quote.

Starting point is 01:16:02 That's zander.com. If you want to go from in debt to wealthy, in debt to incredibly generous, there is a shortest, quickest, most efficient path. We call it the Baby Steps. We have proven it with tens of millions of people to not only get people out of debt, but also into wealth,

Starting point is 01:16:41 becoming Baby Steps Millionaires. And the fastest way to do that is with a game plan, and the game plan is tied to an app called Every Dollar. You can download every dollar for free in the app store or Google Play. It's going to put you on a budget and walk you down the Ramsey Plan with personalized recommendations and coach. for your situation, much like you were calling in here on the show. You're going to hear the same kind of stuff.

Starting point is 01:17:05 It's going to push you to do the same kinds of things for you to win. It's not there to sell you anything. We're not going to sell you on debt. We're not going to sell you on three easy payments. We're going to sell you on the opposite, and that's getting out of debt and into wealth. Every dollar. Download it for free in the app store or Google Play. Carrie is in Austin, Texas.

Starting point is 01:17:25 Hi, Carrie. How are you? Hi, I'm great. How are you? Better than I deserve. What's up? Thank you so much for taking my call, Dave. I'm sorry, I get so emotional. I'm seeking guidance with my new situation as a widow.

Starting point is 01:17:42 I'm wondering, can I buy a home elsewhere where I want to be, not where I'm at? And raise and homeschool our seven-year-old daughter, as we have been, and then work maybe once a week or something to keep my skills up at my job, and then have my retirement secured with what I have. Oh, Carrie, I'm so sorry. Oh, thank you. Was it sudden? Yes.

Starting point is 01:18:09 Okay. He was diagnosed on Thursday and passed away Friday. Goodness. Oh, my gosh, Carrie. How old? Completely unexpected. He had just turned 53. Oh, my gosh.

Starting point is 01:18:23 I'm so sorry. How long ago was this? It was in May, mid-May. Just the other day. Oh, Carrie. Oh, I'm so sorry. Okay, so what is the financial situation now? Did he have life insurance? We had a life insurance policy.

Starting point is 01:18:40 So there's 350,000 there. Okay. We had saved up. We have about $30,000 in the bank. We had, and then I have his pension coming in and Social Security. Social Security is very minimal. I have a seven-year-old daughter. We have a seven-year-old together, but we also have a daughter 19 from his previous marriage.

Starting point is 01:19:03 So between my seven-year-old and I, we have about 700 in Social Security, and his pension will be about $4,300 a month. Okay. Everything before taxes are there. And you're living in a home you don't want? I do not want. I mean, the situation is that he had just retired. I went back to work. I'd been homeschooling my daughter for three years.

Starting point is 01:19:25 I went back to work full-time doing contract work on the road, and he, you know, as retired, took over homeschooling, and we were out doing contracts in the hope of finding a new place to settle down, because I promised that I would live in Texas for 10 years, and then at that point, and when we retired, then we would go where I want to do. Where do you want to go? And I'm not sure. I honestly don't know.

Starting point is 01:19:53 possibly Utah where I have a lot of very close and supportive family, but I don't know. Okay. Okay. Well, that'll be the first step, right? Is to kind of figure out. Do you own the home mirror in? That's one of my biggest problems. We owned the home.

Starting point is 01:20:07 We paid it off years ago, but I did not have my name on it. He bought it before the year before we got married. We paid off together over five years. And then we'd never put it in a, we didn't have a will or anything. And so now, by Texas, law, the home goes 50-50 to our daughters. And I own nothing of it and only have the right to live there. And I can't do anything about it unless I want to have it, you know, completely drug through court. Oh, I'd completely drug it through court. Yeah, what's the home worth?

Starting point is 01:20:42 $2.40,000 worth of drag it through court. Yeah. Is there a spousal, there's no spousal protection? An attorney told me that I was. would have my, I would have to pay every single year to have, for 11 years for my seven-year-old to have representation for her to make sure anything that happens in her best interest, and it can't be sold until she turns 18. Yeah, I think you need a new attorney. I don't, I don't know Texas law, but that, that answer given the circumstances is weird. So it doesn't mean that it's not true.

Starting point is 01:21:22 It might be true. again, I'm not an attorney, and I don't know Texas law. Texas has some unusual real estate laws. So, but I do want to most... At this point, oh, forget. Go ahead. At this point, what? You're going to walk away from $240,000?

Starting point is 01:21:40 No. Right, I know. It seems insane. I basically been told I have the right to live there for life. Yeah. I know what one attorney told you. I'm telling you I'm going to get another attorney. Okay.

Starting point is 01:21:53 And then with the money that I have from the life insurance, what do I do with that? Where do I, can I put that towards another house? Am I better off to invest it for my retirement? I don't have a retirement account now. Okay. Are you able to live on $5,000 a month? I could live on it. Okay.

Starting point is 01:22:13 So you have that coming in. His pension is social. Okay. And if you sell the house, half of it today, half of it goes to the 19-year-old, and the other half goes with you with your 7-year-old, right? Right. But so you're staying there for a while, no harm, no foul, even though you don't want to. I'm going to sit there for a minute.

Starting point is 01:22:37 Can she take the 120 and put it towards a house for the, but you can't because it's the settlement? The child owns the money is what she's been told. Again, I'm getting, I'm, I'm, I'm, I want some other legal advice on this. I'm not accepting. I've researched on a little bit, and that seems to be the truth. Yeah. But I will see other.

Starting point is 01:22:58 It may be. It may be. Okay, so let's assume that it is. Assume you're stuck with that solution, okay? Then what I would do is this. Normally, when someone passes away, what we tell the remaining spouses, try to make no major decisions for a year. Yes. If you can.

Starting point is 01:23:14 If you can. Because it takes a little. while, especially with something this sudden, Thursday to Friday, diagnosis to death. Wow. You know, it just comes at you so hard. It takes a little while to just be able to breathe. Yeah. Yeah. And we can hear it in your voice, and I don't blame you. And so what I would do is live on $5,000 a month. I would park the $3.50 in something very like a high-yield savings, something very innocuous, and just sit there a little bit and cry. That's all I would do.

Starting point is 01:23:51 And give yourself some time to breathe. Now, when you can breathe a little better, six months minimum, probably closer to a year, we can make a decision about whether we keep the house or sell the house based on the information we gather between now and then. But in the meantime, just sit there.

Starting point is 01:24:09 It's not costing anything. And a little bit of utilities or whatever. It's not a big deal. and it might be half of it be your daughters, and so you do want to take care of it. Let's just sit there and get where we can breathe. And then we talk about, okay, if we sell the house and move to Utah next spring when the grass gets green in Texas, what are we going to do?

Starting point is 01:24:36 Are we going to take the 350 and put it down? Are we going to invest it? And what am I going to do for my career? What were you doing in contract? What kind of work? Lab scientist. Okay. And if you worked one or two days a week, Carrie, doing that, what extra, how much could you make?

Starting point is 01:24:55 One day a week, I figure I can make about 1,200 a month. Yeah. In Texas, Texas does not pay well at all. Okay. But you don't even have to decide that today either. Okay. But, you know, so long term, we've got some career choice that we want to do, where we want to live, what we're going to do with that particular house and what we're going to do with the three. 350. All right. But it's pretty easy to say, you know, if things go the way it feels like right now,

Starting point is 01:25:23 you're probably going to be in Utah. You may or may not have control of some of the equity of this house. You are a cautionary tale for everyone to have a will. But I'd probably go 50-50 with the money, put some on a house, keep some in investments for retirement. Mm. I forgot to ask how old she is, but she's got a seven-year-old. She's got the ability to make some money. Yeah.

Starting point is 01:25:50 I don't know. I don't know. Just take your time. Just take your time, hon. I'm sorry you're facing you. I'm so sorry. Oh. Ladies and gentlemen, Mama Bearlegalforms.com.

Starting point is 01:26:00 You can have your will done in just a few minutes. Everyone needs a will. Welcome back to the Ramsey show in the Fair Winds Credit Union Studio. I'm Dave Ramsey. Rachel Cruz, Ramsey Personality. My daughter is my co-host today. Matthew is in Greenville, South Carolina. Hey, Matthew, what's up? Is it worth going back to school and going into debt for a job that will bring me more fulfillment if I have a financially viable path already in front of me?

Starting point is 01:26:41 No. Hands down. Hands down, I wouldn't go back to school and go in debt. I might go back to school. What is it you're wanting to study? Nursing, eventually be a nurse practitioner. Okay. Don't you just pay for it? Kind of expensive.

Starting point is 01:27:03 Yeah, I know. But just pay, you could do it. What do you make now? Right now, so I have a degree in environmental science. I've been working for nonprofits for the last several years as fulfilling it was. As it was, it was certainly not lucrative. So I'm kind of starting over. But, I mean, environmental science has things that aren't as fulfilling but are for profit that pay double what you've been paid.

Starting point is 01:27:29 Yes, sir. So I had already transitioned. I'm currently working in medicine. I'm using an EMT certification. Oh, good. Will they pay for your nursing degree? No, sir, not entirely. I would still, especially with a master's program on top,

Starting point is 01:27:47 I would probably be looking at 30 or so in debt. That's not much. Okay, good. So that means you'd come up with 30 cash. You got this. Where are we going to get 30 cash? And you think that would be? worth it even if I can stay the course and be making a similar amount without that debt

Starting point is 01:28:06 in a similar amount of time with my current company. So the pay doesn't change when you become a nurse. You'll be paying what you're going to pay, but you think you would enjoy the nursing side way more long-term. Right. What do you make now? About 45. You make a lot more than that as a nurse. Yes, sir.

Starting point is 01:28:27 So the pay does change. So this is an injury level position with a company, and I do see a path to increase that significantly over the next 45 years. Like double? I'd be looking at about 4 to 5 in school to become a nurse practitioner. Okay. And after that period, let me stop a second. Okay. So number one, I'm a huge believer in education that adds opportunity that's real in the marketplace.

Starting point is 01:28:53 Being a nurse is an excellent field as opportunity is everywhere. Being a nurse practitioner is right next to being an MD. You can do a lot of stuff as a nurse practitioner that's in the $100 to $150,000 range. A lot. Okay? We work with them every day. It's a great field. Love the idea of going there.

Starting point is 01:29:19 Would I pay cash for it? It's the only way I would do it. can I get scholarships from a hospital or a medical organization that wants me to work for them and will furnish all the pay for this? Because there's always a nursing shortage, always. And so a hospital corps always are looking for nurses and always willing to help people become nurses, especially if you commit to work for them for a while. And so I'm going to investigate those kinds of things if that's where you want to end up.

Starting point is 01:29:48 I'm not making this decision purely on what you can make. make, I'm making the decision based on what you want to do with your life, and I'm making the decision based on what kind of opportunities you have. And, again, nursing and nurse practitioner are excellent opportunities in the marketplace, and have been for decades. Yep. Thank you for that. But pay cash.

Starting point is 01:30:16 I think I had made my initial schooling decision based around what I was passionate about and where I wanted to end up, and I ended up in a position. that was not financially viable, but I understand that the return on investment for something like nursing is very different. Yeah, that's true. But again, it's not going to be – we're not going to tell you to go into debt to do it, and I would not go into debt to do it. I'm going to find a way to work around that.

Starting point is 01:30:40 And as an adult going to work as an EMT inside a hospital situation of some kind, that'll put you on the rolls, and they'll start writing checks for scholarships, start writing checks for tuition. and they do it all the time. And you pay, you know, and you work your way through. Yeah. If it takes you, if it takes you a year longer, so what? Yeah.

Starting point is 01:31:01 Not a big deal. But, you know, you're not a traditional student where you just get to quit life and go sign up and work 24-7 on going to school. You're not 18 years old. So this is adult time now. So the way we do this is going to be different while you earn your way all the way through it and or who you're working with or who you're working for. and also back to your other career. Keep in mind the career field wasn't the problem. It's just you chose to work in an underpaid situation in your field.

Starting point is 01:31:35 And because you were looking for some kind of a meaning in the nonprofit world. And that may or may not be there. I don't know what you were doing. We didn't get that far into it. But that's the thing. So yeah, yeah, we're big on education. And the other thing is this, too. when it comes to your nursing degree, nobody cares where you go to school.

Starting point is 01:31:57 Never one time is a nurse coming to draw my blood, and I say, wait, wait, wait, where's your degree from? Never once. Never once. Did I talk, you know, have we had, have I in an, nurse practitioners, we've had them as concierge. Never once. I don't know where the guy I went to school. I have no idea where he went to school. My current doc, I do not know where he went to school.

Starting point is 01:32:20 and he's my primary. Do you know where yours went to school? I don't really have one. You don't have a doctor? Okay. Good. You apparently don't need one. Terrible.

Starting point is 01:32:34 I see my OB. I do what I need to do. Does your OB? Do you know where your OB went to school? Sweet Dr. Martin, no, I do not. Okay. I do not. Yeah.

Starting point is 01:32:44 I probably could. I should know. He's virtually a family friend. He delivered half the Ramses. I know. Yeah. We love him. But, well, we don't, we don't, none of us know where he went to school.

Starting point is 01:32:54 We love him. And the camels. I don't know if I'm allowed to say that. Yeah. Yeah, that's great. Oh, George. George. George, too.

Starting point is 01:33:01 There they go. So he's, he's around a bunch of us, but none of us know where he went to school. We just like him. So this idea that where you go to school matters is a lie. So what you want is the least expensive school that has a reasonably good level of knowledge that they're going to transfer to you. we don't want you to be dumb when you graduate but we also this idea that you came from some famous school and that is some kind of an ingredient in success is the biggest lie that has ever been told about higher education and so nothing the only time i've ever seen that was i graduated from the university of tennessee and i

Starting point is 01:33:37 was interviewing for a job and i went in for a job interview and i went to one one i went to middle Tennessee State University for one year before I went to UT. And the guy had on a MTSU and a Middle Tennessee ring. And I was so dumb in the interview. I went, oh, you went to MTSU? I used to go there until I upgraded and went to UT. I didn't get the job. The upgrade. Yeah, I insulted his school, so I didn't get the job. But yeah, that's when it mattered where I went to school. But other than that, I don't think nobody ever cared where I went to school. All they cared was could I help them? Do you think, though, a small percentage of the country when you're looking in certain industries, small, small, small, one percent?

Starting point is 01:34:17 Yeah, really snobbish country club, you know, one percent of the job job job. Well, I just think of like hedge fund, like all those, like, you know what I mean? Like, like, you get small, small. If you're going to get hired by a bunch of guys that went to MIT, you probably should have gone to Harvard or MIT. Right. Right. Yeah.

Starting point is 01:34:34 But otherwise. But for majority of us. In the real world out here where the rest of us live, nobody gives a rip. Yep. I'm not against vacations. broke. If you've paid off everything but the house, you've earned the right to celebrate. Come do that on the live like no one else cruise. Hang out with me and the Ramsey personalities for seven days in the Western Caribbean. Join the world's largest debt-free scream. Here,

Starting point is 01:35:21 exclusive Ramsey teachings and more. The best cabins are filling up. Lock in yours with a $600 deposit at Ramsey Solutions.com slash events or click the link in the show notes. Buying or selling a home is a high-stakes proposition. We had a caller of the other the day. His mother-in-law had sold their house for $330,000. The appraisal came in at $375,000. And apparently the real estate agent had made the mistake of pricing it too low, and they'd already sold the house, is under contract. She lost $45,000 by choosing the wrong real estate agent. Yeah, you need a pro in your corner. A mistake in the real estate business has zeros on it. That's huge. You need somebody that knows what the flip they're doing that does a lot.

Starting point is 01:36:22 lot of transactions, high protein, high octane, baby. Ramsey trusted, we vet real estate agents to have the right level of experience to guide you step by step and avoid these expensive mistakes. Connecting with a Ramsey trusted, vetted real estate agents, pretty easy, and it's free. Just go to Ramsey Solutions.com slash agent or click the link in the description. Zoe is in Seattle. Hi, Zoe. How are you? I'm good. How are you? Better than I deserve. What's up? I just had a question about what I'm a college student and I was wondering what my moral obligation is to paying back my mom for a college debt so far and kind of while I'm in school and also like how to tell her I don't need her help anymore or I don't want her help with money

Starting point is 01:37:16 anymore. Is that makes sense? Mm-hmm. Mm-hmm. So did you, before you went to school and before she started paying for it, did you agree to pay it? Did you have an agreement with her? I did not. Technically, I did not. She was a single mom, and so she never really, it was never in her mind to save for me growing up. And she, a year prior for me going to school was just kind of like saying, I'll take care of it, I'll take care of it. And then this last year, my first year of college, she, it seemed to be a very black male situation. And it was very much putting a loan in my face and saying, I'm doing this. I'm paying this, so you have to do this. And I kind of just want to tell her to get out of all of that and help her pay it back.

Starting point is 01:38:09 Yeah. Well, okay. You ask you if you have a moral obligation to repay someone that did something, without your agreement. If you shook hands or you looked at your mom and said, Mom, if you do this, I promise to pay you back, then you would have a moral obligation. If there was no discussion where you promised to pay her

Starting point is 01:38:30 and she said, I'll take care of it and she sent you to school and then later on she decides she wants you to pay her back, no, you do not have a moral obligation. Okay. Does that logical to you? Yeah, that makes sense. I guess it's just when there's more, money kind of being like tied to someone it definitely makes it difficult.

Starting point is 01:38:49 Yeah, it's different when your mom's a travel agent for guilt trips. Yeah. Yeah. Yeah. Yeah. And you might Zoe, you know, like depending on with the relationship and all that, you may be out of school in a few years working and deciding I'm going to just write her the check eventually and just so that there's nothing there just from a relationship standpoint.

Starting point is 01:39:08 But at that point, someone that can't relationally have the IQ to be able to be with you, right? and to be your mom and that's still holding that over your head, even if you paid it then, it probably still wouldn't make her happy. You know what I mean? Like, that's a, that's an odd. Yeah, that's a strange thing to. An odd thing to put over your kid.

Starting point is 01:39:29 To hang stuff on your kid's neck. So where are you in school? I'm going to my second year of college, so I'm still very much in it. And so how are you going to finish? I'm going to work my way through it. Honestly, I chose to do an in-state school that was cheaper in general. And my first year was more just because of housing and all that for my loan.

Starting point is 01:39:58 But this next year, I'm planning on not taking out loans and paying for it myself, which is also kind of the problem because she, even though she doesn't want this loan, she still, or guilt jokes me about it, she still has like this weird, want to, like, push through with me, with me attaching my name to loans for the next few years, and I'm, like, very against it. Yeah, so you're working and you make enough to eat and go to school? Yes, I do. Good for you.

Starting point is 01:40:28 What are you doing? Right now, well, I'm going to school for marketing, but I'm just a server, but in Seattle, I make a good amount of money to live on, and my school is cheap enough where I can afford it. Yeah, boy, you're... Well done, so. There's not many of you. So there's a loan taken out. Whose name is the loan in?

Starting point is 01:40:48 It is under hers. Okay. Then it's her problem. And just for the first year, she didn't pull like all four years or something. No. It was just the first year. And this next three years should be a lot cheaper because of the housing. And it's a quarter system around here.

Starting point is 01:41:05 So it's cheaper in general. And so I'm just planning on paying cash. Yeah, just tell her, say, Mom, you said you were going to take care of it. So the loan is on you, and I'll pay for the rest of school, and I love you. Thanks. Is there any advice you have for me having a conversation with her? Because especially right now, she's wanting me to sign a loan for the next year. Like, how does that conversation go with anything? No, I'm not doing that.

Starting point is 01:41:30 Don't do not go borrow any more money, Mom, because I'm not paying any of it, and you don't need the load. I got it, Mom. I'll take the last three years. Thank you. Okay. Please don't take out any more loans because you're going to have to pay the mom.

Starting point is 01:41:45 Yeah. Is there any weird legal thing that her mom could still? It's a parent plus loan. She could take the loan out in Parent Plus and use it herself. Right. Fraudulently. Yeah. But then she's got to pay at herself.

Starting point is 01:41:57 So it's all on her. But don't let her use the excuse of using the loan in any way and blaming it back on you. Just emotionally don't do that. It's not a legal problem. 100% you're not liable for a parent plus under any circumstance. And weirdly, Zoe, this may say, I feel like I'm sounding like you. I'm a little paranoid. Would you say, would you text the mom after the conversation?

Starting point is 01:42:21 Recapping. Mom, just again, thank you so much for what you've done. I have the next three years going forward. And the first year, Parent Plus is on you because you said you had it. I don't know. I sent an email and then I wouldn't do a text. I sent an email and then print a copy of the email off and keep it in a file. I don't know.

Starting point is 01:42:40 I may do that, Zoe. It's not a legal thing, but it's, It might come up later and go, look, Mom, I told you. Look, here's when I told you. Here's when I told you. Because her memory's weird. Yeah, exactly. I feel like that's a good point, Rachel.

Starting point is 01:42:53 Yeah, that's not paranoia. That's a good point because she changed the deal once. She'll change it again. Right. Yeah, for sure. Yeah, I'll send her a little one-page email. Again, honoring. Thank you for the help the first year.

Starting point is 01:43:06 And just a reminder, you told me that, you know, you had college covered. So that first year is on you. I will take care of the next three years. Please do not take out any more loans for me. I've got this covered. Thank you for what you've done for me. I love you. And just leave it at that.

Starting point is 01:43:22 Something very simple. Don't try to preach a sermon at her about how she's supposed to do something. Leave all that out. I know it's in your head, but don't say it. Yeah. And Zoe, if you need a one-on-one in-person conversation, you can have that too. But I would just put something in writing in writing in case you wanted to pull it out of the file later and say, Mom, look, I clearly told you.

Starting point is 01:43:42 Zoe, what kind of school are you going to? I'm just curious. I'm going to, you probably have not heard of it. It's Central Washington University. Okay. Between, yeah. Is it just like a four-year? It's a four-year school.

Starting point is 01:43:53 Yeah, okay. And you're getting a degree in marketing. Marketing and entrepreneurship. Oh, you're amazing. Good for you, Zoe. You're going to do so good. So great. You're scra-you're scrappy.

Starting point is 01:44:05 Scrappy. If I have another second, I do have a question really quick. quick, about should I transfer? Because I do make more money living where I went to high school versus where I got to school college. Is it going to be smart for me to transfer to do online school and make more money that way or no? I think I'd stay the course where I am right now. You've got it lined out and you can pull it off right now. If the only way you could pull it off would be online, I might. But I like what you're doing right now. I'd stick with that for today. If something gets crossways later, you can always switch over.

Starting point is 01:44:42 But, and keep in mind that, you know, you got to make sure anytime you're moving stuff back and forth that all the credits transfer and you don't have to start something over again. And some schools match better with others than not. So you want to be sure you check all that out if you're going to make a move. I personally wouldn't. I'd probably stay the course just because I, you've got this so dialed in. I don't want to mess with it. All right, let's cut to the chase.

Starting point is 01:45:37 It's easy to get discouraged about crazy house prices and interest rates. when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at Ramsey Solutions.com slash agent. That's Ramsey Solutions.com slash a... Today's question of the day is brought to you by Y-ReFi.

Starting point is 01:46:28 one financial mistake doesn't have to define the rest of your life. If you've gotten behind and gone in default on your private student loans, Y-R-R-R-E-FI can help you explore low-fix-rate refinancing options and affordable payment plans. Go to Y-refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey might not be in all states. Today's question comes from Cassie in Idaho. I'm on Baby Step 2 and putting all extra money each month to my student. loan debt. After learning about sinking funds, I started setting aside some money to save for future expenses, such as gifts, car and home repairs, property taxes, professional memberships, etc. My sinking fund is growing about $2,000 each month, and this is separate from my starter

Starting point is 01:47:16 emergency fund. Should I continue building the sinking funds, or should I be throwing that extra money, including my sinking fund savings towards the debt? Yeah, on Baby Step 2, there shouldn't be many sinking funds. I mean, I think it's smart to know if you have a car that's going to need a lot of repairs throughout your process of paying out debt, putting some money aside to build for that so that if it comes, you know, you're able to. But that's also what your emergency fund is there for. So no, I would not be doing that many sinking funds at this stage. Now, once you get past baby step three, that's when you have a little bit more of that luxury to do that kind of thing. But unless you see something looming in the future that you absolutely have to do, then I would be putting every money,

Starting point is 01:48:01 all the rest, towards debt. Yeah, 100%. Now, for those of you don't know, a sinking fund is just simply a savings account within your budget. And so you're saving money for, it's a miniature savings account, you're saving money for stuff. So you're not saving money for a future car purchase while you're getting out of debt. No. You're not saving money for a trip while you're getting out of debt.

Starting point is 01:48:26 No, because you're getting out of debt. You pour everything on the debt, wide open, scorched earth. So you should not have a lot of miniature savings accounts, hardly any, to Rachel's point, while you're getting out of debt. And again, for those of you don't know, a sinking fund comes from actually a business term when you're doing retained earnings or you've got a piece of real estate as an example. For instance, if you purchase a piece of real estate and you say, well, the roof has five years of life left on this commercial building. And so you start setting aside, you know, 20% of the cost of a roof per year so that five years from now you have enough to pay for the roof. It's a systematic savings program for repairs and replacements in a commercial building setting. That's where the phrase comes from.

Starting point is 01:49:15 Or if you're in a business that uses equipment and you have 10 trucks on the road that do a heat and air HVAC repair, Well, you systematically need to replace those trucks as they age, and so you would have a systematic thing in your business budget called a sinking fund that goes into retained earnings to do that. That's where it came from, and we just pulled the terminology over and put it into every dollar, and now we've got consumers with sinking funds for Christmas, which for somebody in the real estate business is probably a little bit humorous. But anyway, but that's really what it is. It's a miniature savings account for a future event.

Starting point is 01:49:54 that's all it means and it means you save up for it and pay for it and you don't go into debt for it in the future but right now while you're getting out of debt and baby step two you really shouldn't need a bunch of them all right nathan is in jefferson city missouri hi nathan how are you oh not too bad how are you guys better than i deserve how can we help hey so i got a question on on a truck i i don't know if i should buy a new one or if i should just fix mine. Okay. How much?

Starting point is 01:50:28 Well, what, I was going to ask, how much is it to fix the truck? But what kind of truck is it? How old is it? It's a 21 years old. 2005, Dodge Cummins. I have $22,500 into this truck right now. And it's going to cost me at least $7,500 to get it fixed. How much is it worse?

Starting point is 01:50:48 I'm in it almost $30,000, like 10. Mm. Okay. What's wrong with it? The transmission just went out in it. What are you using it for? I was using it to drive back and forth to word, but, I mean, now I'm just having to ride with people because I work on the road. You work on the road?

Starting point is 01:51:13 Yes, sir. I'm a welder on the road. Okay, so you're traveling with business. Yes, sir. And how are you making your traveling with that? You're riding with other people on the traveling, or are the company? but he's producing your travel. I'm riding with other people in their own vehicles.

Starting point is 01:51:32 It's not like, I mean, yeah, I'm just riding with other people. Would you have been doing that anywhere, or would you have been driving this old truck on the road? I would have been driving my own truck. Okay. Okay, so you guys travel and do welding. Is that what you said? Yes, sir.

Starting point is 01:51:49 Okay, and normally what you would have done is just drive. Everybody drives their own car to the job site, but it's all over the place, right? Yes, sir. Okay, what do you make? 1,900 a week. What did you say 9900? 29,900?

Starting point is 01:52:08 A week. A week? Yes, sir. Okay, so you're making 150 a year? Yes, sir. Good job. Good for you. That welding thing's working out for you, brother.

Starting point is 01:52:21 All right, so is the truck For? Yes, sir. I paid it off three years ago. Good for you. Okay. Well, a $10,000 truck, oh, you don't do a $7,500 repair too.

Starting point is 01:52:37 Okay. I would rather just sell the truck and buy a $10,000 truck. Okay. That I don't have to repair. If you want to do that, do you, do you have any money? Yeah, I mean, I got money saved up, I guess. How much? I don't know.

Starting point is 01:52:54 Right now, like $10,000. Okay, good. And what would the truck sell for as is? A couple of grand. A lot of people have told me like 7,500 drops. That's good. So if you took the 10,000 you saved up, do you have any debt? No, sir.

Starting point is 01:53:11 Good for you. Are you single? I got a girlfriend. I have two kids. Where's all your money going? Well, I don't really know, honestly. I mean, I've tried to, I put a new motor in. it a couple months ago. That was $9,000. I paid cash for it. I have a farm. I'm buying cows.

Starting point is 01:53:36 You own the farm? It was in a will. My mom passed and it's mine now, but yeah. And you're buying cows on it? Yes, sir. Who's taking care of the cows with you on the road? My dad. Okay. Interesting. All right. So you're putting, how much in beef do you own? What's that? beef worth. In Missouri, I mean, a cow-calf pair would be like 45. Yeah, how many of them you got? I have 10. Okay, so that's like $50,000 worth of cattle right now.

Starting point is 01:54:13 Yes, sir. Okay. Did you pay that for it, or that's what's worth? That's what it's worth. I did not pay close to that. Most of them was what my mom had got. Okay. Answer to your question is I would take,

Starting point is 01:54:27 some of your money and sell the truck and put that 7,500 with some of your money, maybe seven grand, and buy about a 10 or $15,000 truck that's 10 times better than the one you got. That's the answer to your question. But the second thing is you're making too much money to not know where it's going. And I don't want you to wake up 10 years from now and go, I made $150,000 for 10 years. That's $1,500,000 and I have no idea where it went. that's no way to live. So you need to know where this freaking money's going starting today.

Starting point is 01:55:01 Ready set go. That's the grown-up part. And start investing, Nathan, if you don't have a rough IRA, start some stuff now. Yeah. That's going to set you up well. I'm going to send you a copy of the book, The Total Money Makeover, which is how we teach the stuff here. The baby steps, we work you through every bit of this. Pay cash for the truck.

Starting point is 01:55:19 You need an emergency fund, a three to six months of expenses. You need to start investing 15% of your money. money into a good retirement plan, and you need to keep buying cows. It sounds like you're good at it. And you're making great money. Is that babysat 4B? Buy some cows. Buy some cows. There you go. Hey guys, George Camel here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing and somehow walk out $87 later with toothpaste and

Starting point is 01:56:20 emotional support candles? Just me? Okay. Well, that's the problem. Most people don't pay attention to how they spend their money, so it does whatever it wants. And that's why we created every dollar. It's a budgeting app that helps you create a simple plan for your money. Every dollar's simple, it's clear, and it helps track where your money's actually going. Plus, you get daily lessons, to do's and reminders along the way. It's like having a money coach in your pocket. Your money's been freelancing long enough.

Starting point is 01:56:44 It's time to give every dollar a full-time job. Go download every dollar for free on the app store or Google Play. Our scripture of the day, 1 Corinthians 2-9, no eye has seen, no ear has heard, and no human mind has conceived the things that God is prepared for those who love him. Catherine Huppard said, as one goes through life, one learns that if you don't paddle your own canoe, you don't move. That'll work. Fun stuff. Hey, we wish we could get to every call and question here on the show.

Starting point is 01:57:33 We simply can't. There's no possible way the lines stay jam most of the time. you can go and get an absolute Ramsey answer by using the tool Ask Ramsey. It's our AI tool that's built and trained only on Ramsey data and Ramsey input. So you're going to get a pure Ramsey answer. Nothing from Reddit. Nothing from TikTok. No, it's all Ramsey.

Starting point is 01:58:00 You get the answer the same way we'd answer it right here. It's almost as sarcastic as I am. It's the boomer. Almost as nice as Rachel is. So ask your question today at ramsysolutions.com or click the link in the description or on the podcast on YouTube and it'll set you up with the AI tool, Ask Ramsey. My prayer for the future of Ask Ramsey is that you get to put in, which response, you get to click which response. If it's like an app one day, you get to be like, I need a Dave response. Or I want Rachel to tell me this.

Starting point is 01:58:29 I want Jane. I want Georgia's nerd response. Yes, whatever it is just to get your own little flavor. See, I always think they should have changed Siri for men into their wife's voice. For the wives have all the answers of everything. The wife's voice is like, because then the men will listen, right? I'm just saying, hypothetically. All right.

Starting point is 01:58:50 Susan's in Flint, Michigan. Hey, Susan, what's up? Hey, how are you guys today? Better than we deserve. What's up in your world? Good. Glad to hear it. Well, the question I have, we lost my dad back in January.

Starting point is 01:59:03 So unfortunately, there's been a little bit of a shift in, and, you know, the income mom has coming in now. We want to, everybody agrees. We want to keep her, you know, in the home that they've lived in for, you know, 60 plus some years. Wow. And in order to do that, they put mom on an extremely strict budget. it. Dad kind of spoiled her, maybe spent money they didn't have to spend. And she would just ask and get. So this is what the siblings that are managing her plan, this is kind of what they're up against. But they've done a complete U-turn and, you know, basically she's given $100 a week to live on for everything.

Starting point is 01:59:55 and she's now in a situation where she needs to buy the pens and she needs to buy insured drinks. So I have a difference in opinion. She lives in a home that she could take a couple hundred thousand dollars worth of equity out of, and I wonder if they should be considering a reverse mortgage for her. No. Reverse mortgage.

Starting point is 02:00:20 Reverse mortgages are horrendous. You know, but on the other, hand, $100 a week? I didn't say on the other hand. You asked me if you should do a reverse mortgage. I said no. Yeah. I wouldn't do a reverse mortgage.

Starting point is 02:00:33 I sell the house for I did a reverse mortgage. Yeah. Oh, gosh. They're a nightmare. They're an absolute nightmare. The foreclosure rate on the reverse mortgages is six times the normal foreclosure rate. Okay. And I haven't, in all fairness, I haven't really researched it.

Starting point is 02:00:50 Does she not have any other assets? Well, they lived their life. They traveled a lot, and Dad had even gone to the bank with the idea that he was getting to the point where he might need to take some equity out of their home to finish out their life. So the answer is she has no other assets? She has about $31,000, but out of that they're having to take $1,500 a month to pay her bills. What's her? She doesn't have Social Security coming in? Yeah, yep. She's got a total of 1,450 coming in.

Starting point is 02:01:28 And I've not run through her entire budget. My sister manages her bills. But I guess she's got, with the amount of money that's giving her and my sister who cares for her, that's a total of $250 a week. And how old is your mom? My mom is soon to be 86. In fact, back in the hospital again, she's. It's not in the greatest health, and she's got the onset of dementia, the thought of pulling her out of her house right now.

Starting point is 02:01:58 I wouldn't. Yeah. I wouldn't do that. I think your sister's probably doing a pretty good job. Yeah. She works hard. It's challenging. Not always easy for her when you have six brothers and sisters that, you know, that judge

Starting point is 02:02:14 everything that you do. But, yeah, they're managing. Yeah. Yeah, you know, your parents didn't leave much, but they used it all up right to the end. But with, sadly, I'm so sorry about your dad, and sadly with what you're telling me about your mom, this is probably not a long-term proposition. Would you agree with that? I would agree with that. Yeah, I'm sorry to say that out loud, but.

Starting point is 02:02:41 No, no, it's reality. You know, it might be a year or two, but it's probably not five, statistically. Yeah, and my thought is, with that being said, why not yank a little bit of money out of her house? So that, you know, and she doesn't want to spend money on herself. She wants, because there's a lot of us kids, a lot of grandkids, she wants to be able to feed them when they come over. And a lot of times that might be ordering a meal out because she's not capable of. So the six children don't have any money? You and your budget sisters?

Starting point is 02:03:17 Okay. I'm glad. I'm glad you went there, Dave, because that would be a part two of my question. Most of us are just average people. We pay a couple of us chip in, pay for house cleaning every month because it's a pretty decent-sized house so that my sister can devote her time to mom. But long story short, I do have a brother out there that's a multimillionaire. And he has done a lot in the sense that he gives generous Christmas gifts. And he would be there in a minute if all of us.

Starting point is 02:03:53 I would just make a proposal to everybody that we try to put together, you know, a thousand dollar a month budget between six of us or a $600 a month budget between six of us and add to that $100 and it doesn't need a lot, but just a little bit to be able to get through because it doesn't sound like we're that far off. And I just hate to, I'm not going to tell you to get a reverse mortgage. There's no circumstance I'm going to use it. It's a piece of crap. If you were going to do something, I'd go get a little home equity loan for $50,000 or something.

Starting point is 02:04:24 But I think you're going to regret doing that when you're just a few hundred bucks a month off. And so, you know, $10,000 a year changes this. That's $800 a month. That changes this dramatically. If everyone pitched in $100 or something. Yeah. And that's probably what I would do. And everybody doesn't have to put in the same amount.

Starting point is 02:04:43 And some maybe can't put in anything. But just so, guys, I think if we could put together $500,000 or $1,000 a month, Mama would be great. And let's just, you know, let's all agree on what portion of that you can put in and what portion you can put in and maybe the multimillionaire brother will pick up the balance. I don't know. I would if I was in that situation. Um, um, because it's not, it's not a long, sadly, it's not a long term proposition. Right. Right. That's a sad thing to say out loud. Sure, sure. But it's, yeah. We're doing a mathematical statistical analysis and sadly we step on people's feelings when we do that. But yeah. But that's... Because $1,000 a month out of her $31,000 that she has lasts a little over two and a half years, you know? So you could take... You know what? I could do that.

Starting point is 02:05:28 Take some more money out of that $30. And then when that money's gone, then we step in, you know? Yeah. She doesn't really need... I mean, of course, if she has a medical event or something, then we got to step in and cover the $31,000 is gone. That's true. Yeah. Either way, it's six and a half dozen other, but I'm probably going to use that up and or some of it.

Starting point is 02:05:48 maybe take it down to 10, maybe make 21,000 the next 21 months. We'll see where we are after 21 months. But, and not aimed at you, Susan, because you've had the right tone about every bit of this as we're talking about it, but aimed at everybody else because I'm at the stage of where we've got older parents and siblings taking care of older parents and so forth. And my wife and I have a rule, and I recommend it to all of you. the brother or the sister that's on site doing everything, you guys shut up and help them.

Starting point is 02:06:24 Support them. Don't bitch at them. Stand by them. That's not aimed at you, Susan. You weren't doing that. But the one that's over there doing the stinking work, taking care of somebody, take care of them. That puts this hour of the Ramsey show in the books.

Starting point is 02:06:39 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 principal. of peace, Christ Jesus.

The Ramsey Show - A Bigger Paycheck Won't Fix Bad Money Habits

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