The Ramsey Show - Building Wealth Is Simple (But Not Easy)

Episode Date: March 5, 2026

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Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit Union Studios, this is The Ramsey Show. Rachel Cruz, number one bestselling author, Ramsey Personality, co-host of the Smart Money Happy Hour. My daughter is my co-host today. Open phones at AAA 825-5-225. Thanks for joining. us, everybody. Steve is with us in Cleveland. Hi, Steve. How are you? I'm doing well. How are you? Better than I deserve. What's up? Hey, yes. I took out some loans for my business last year, totaling about 90,000. And I am unable to afford the payments now, of course. Went through

the slow season being that we are in the Gacking Carpentry business. And so, that was pre-taxing on funds. And so I'm looking to join a debt consolidation program here that will reduce my weekly payments $2,400 down to $1,200. I'd like to do that, but my wife asked me to call you. So here I am. Oh, man. What a motivation cost, Steve.

So you borrowed $90,000 for what? The deck business, I was looking to scale it. And you didn't? No, going into the slow season here, we did not. Well, I mean, you knew it was a slow season when you borrowed the $90,000. Yes, that's correct. I intended to spend that money on marketing, doing some home shows, upping our marketing budget through that time, bringing on a salesperson,

just ramping up the sales and, kind of muscling through the slow season with still bringing in revenue, but the weekly payments were just more than what we could handle. Their sales didn't go in the same trajectory that I had planned on, and we did very poorly these last couple months in sales. Okay. Well, there's a correlation between doing poorly in sales and the slow time and the fact that you dumped $90,000 in stress on top of your own.

head and that affects you running your business well. I've been there, I remember, and it's not a fun thing. So you're really feeling this pinch hard. So what does your business make? What's your gross revenues on your business in a year? So we're going into year four now. We went from $250,000 in 2024 to $2,000. to $350,000 in 2025,000 in 2025.

I'm sorry, that was around September here. We got to $440,000 at the end of 2025. We did about $100K in sales in September. Okay. So the first thing is, I hope that you've learned your lesson, that borrowing money to expand your business is a dumb. idea. Yes. It's a dumb idea. Yeah, I do not intend to do that ever again. Okay, so the next time you get ready to expand, use your profits to expand and don't take as much home or don't expand, one of the two. Okay, those are your two options.

Borrowing money, very seldom works, especially in these scenarios, what you described here. So you, the magic sauce you thought was marketing and some sales guy, when it turns out listening to your sales numbers, you were the magic sauce. You took a business from 250 to 450 in 12 months. That's pretty freaking incredible. And so that's your answer to get out of this debt is for you to take the business and kick it in the butt and get it going. And if you hire more people to do more decks during the season, that's fine. The debt consolidation loan, I do not know, how did you borrow the 90,000? What kind of debt is it? Credit cards? No, it's, they were micro-advance kind of loans.

They were a, it was a short-term loan is what it was. So they were short-term loans. Who do you owe the money to you? There's three different creditors. One is, you want me to name the creditors on you? Yeah, yeah. Okay. Yeah, we had micro-advance, forward financing,

and then we had what I thought was a debt consolidation loan for Tello Capital. Okay. So it's good for America to hear these names, because if you hear these names, run. Yeah. Have you contacted a debt consolidation company already, Steve? Yeah. Yeah. There's one that I plan to work with called it's a Coastal.

debt consolidation. Okay, how far longer are you in the process? I haven't signed anything yet. Okay, good. I don't think it'll work, okay? Because what debt consolidation companies do is they typically take credit card debt or consumer-based debt, not small business rip-off debt, and don't pay the payments for a period of time, destroying your credit, and then renegotiate based on the fact that the loans are in default and get a lower rate or a better payment rate. And that's the only way this is going to happen. They're going to put you into default. And so it's going to do to your credit the same thing a Chapter 13 would do to your credit.

Chapter 13 bankruptcy would do the exact same thing. It'll let you renegotiate the debt payments and put them on a five-year plan and get it where you can breathe. But it's bankruptcy. And the debt consolidation in this case, the way this is laid out, the way these loans are laid out is that way. I wouldn't do it. Instead, what I would do is say, I'm going to look in the mirror and say the secret sauce to my business's rapid growth and success has always been me, not something I can buy with $90,000. And I'm going to strap a tool belt on me and about six other people. And I'm going to go build a whole bunch of decks. And I'm going to live on beans and rice. And I'm going to pay the whole thing off quickly and get rid of it. Do you have any retained earnings in the business, Steve? Any cash?

No, hardly, not at this point. Not after a few months of making those payments. Of this. Yeah. When does season pick up for you? I'm assuming spring, summer? That's correct, yeah. Okay, so we're almost there.

I mean, it's March. So here in the next six days. Yeah, I'm going to start booking stuff left and right, taking deposits, and start slamming down money on this 90K and getting rid of it. And I want you to be rid of it in a year. I want you to work. all the time. I want you to work so much, you're about to collapse. And that is your answer. Because filing bankruptcy or using a debt consolidation company, which in this case is going to

look exactly like bankruptcy on your credit. And it does for most of you, by the way. You go into one of these worn out tired, retired actors telling you to get debt consolidation on some cable TV thing. And then you go do it. And basically they don't pay the payments for about six months, you pay them, and then they start settling the debts and or they start paying a payment plan on the debts, but by then you're in default on almost everything. And so it trashes your credit. And if you're already at that point that you can't pay the payments and you go in default, then you could be the ones to negotiate if you need to, especially with credit card companies. Yeah, if you want to quit paying them, you could quit paying them. Pick out one of the three

and quit paying them and let it go into default and then save up a lump sum and settle with them. but these are these were horrible loans the whole thing as you can tell was a horrible idea but the way out of it is you i think you have a golden hammer and i'd swing it statistics show that half of americans don't have enough life insurance or they don't have any at all i don't understand this john why don't people want to take care of their family they think they're going to die or something well i used to be one of those guys i didn't even think about it and one of my buddies said hey the only reason to not have life insurance is if you hate your wife and kids and I immediately went and got term life insurance. That's a gut punch. And oh, you're telling me, and for decades, Dave, I've sat across

people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next. Me too. I mean, you're going to have a crisis here. And, you know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up or she's concerned how she's going to eat tomorrow. These are the two options. Take care of your dad-gum family, man. Term life insurance can replace income, pay off dads, cover funeral expenses so your family can actually have the opportunity to just be sad, to just miss you. That's exactly what it's supposed to be. It's saying, I love you to your family, term life insurance. Jeff Zander and the team of Zander Insurance makes it easy and affordable.

I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800 356, 42.82. The Live Like No One Else Cruise is back. And for all of you who are living debt-free, if you're in Baby Step 4 and beyond, we want to invite you to join us in the Western Caribbean. This is the second time we've done this. This is the only cruise where you can hang out with us and me and Sharon and all the Ramsey personality, seven days in paradise. Enjoying poolside chats, live Q&A sessions. lots of events and things on the ship itself and absolutely high-end ship.

I don't do the cheap cruises. I can't stand them. This is the nice stuff for you people that are already starting to win, right? That's how we set it up. Don't wait. The ship is already halfway full, and the Neptune Suites have already sold out. So lock in your spot with a $600 deposit before it's too late. We are going, of course, in March of 27, one year from today.

So fun. So fun. a lot of fun we did last year. I know. It was great. Looks like we're on about an every two-year rhythm to give you an idea. And so we love to have you go. Just go to ramsysolutions.com slash events or click the link in the show notes. All right. Kevin is in Austin, Texas. Hi, Kevin. How are you? Good. How are you? Better than I deserve. What's up? Hi. So, I don't know if you can, you can hear me clearly, right? I'm 30 years old, and I have made a few

questionable investments that, you know, I spent most of my life saving up and getting ahead. I saved $34,000 over college and my early adulthood. And long story short, I ended up losing everything in penny stocks that someone I knew suggested me to. And now I'm back at my mom's house with my wife. and she's not too happy about it. And I'm just trying to... Do you lose your house and everything?

I was renting an apartment. Okay, gotcha. How old are you in and a job? I do, I do. I'm actually a manager at an In-N-N-Out. I don't know if you've ever been before, but... Oh, we just got one here. They just moved into the neighborhood.

The Flying Dutchman's great. Corporate offices across the street. But anyway, so the... Wait a minute, you were a manager in and out when all this was happening? No. I actually worked at, I had a full red scholarship through college, and I worked at Wendy's and other, like, fast food joints. And I saved up a bunch of money. $34,000.

Yes. But you were not living on the $34,000 when you were doing all of this. You were living on your income. Were you not? No, that was just my savings. Okay. My point is this. There's no reason that you're at your mother's if you didn't lose your job.

You just lost your savings. Yeah, well, the thing is I have a bit of debt. I have a few different cars, and I don't have really enough money to afford any kind of, like, you know, anything food-related or going out to have fun. And I kind of just figured, you know, the ultimate goal is to escape the lower class. And what I've read online is that you need to take a little bit of risk. I think I went the wrong way about that. But my goal is to obviously... I think you read about it in the wrong place.

If you read about financial stuff on TikTok, unless it's us, it sucks. So, no, you didn't need to take a lot of risk. So here's the thing, honey. You know, you have a debt problem, not a I lost money in penny stocks problem. If you weren't using your savings to live on, you were already having. had a life, and then plus or minus savings is the penny stock thing. So we don't blame this on the penny stock. We blame this on the fact you bought a bunch of crap, like cars that you can't afford to pay

on an in-and-out manager's salary. Right. Sell the cars. I could definitely, I could definitely sell the cars for sure. Yeah, you should have. But you can't, yeah. Before you move in with your mother. Okay.

And then would I just be Ubering or do I get like a cheaper car? I thought you had a job. Yeah, yeah, but I have to get to work. Yeah, but you get a $2,000 car. You said, yeah, you said plural cars. How many cars do you have, Kevin? I have two cars. Okay.

And they're both on payments. Yes. Okay. How much do you owe on them? One of them I owe about $30,000. The other one I owe about $20. Okay. She has $50,000.

car debt. And what is your income, sir? About 60 after tax. Okay. Does your wife work outside the home? No. Why? It's complicated. I think that she, I kind of am a big believer of the whole nuclear house, you know, so she takes care of the house. Maybe you don't live in your mother's house if you're a believer in the nuclear house. I think, I think my mentality was that she could just help out if we have to make that sacrifice? Kevin, you got to, you guys got to work. How old are y'all? 30. I'm 30 years old. We got to start working. We got to start.

I do not have children. Okay. Look, both of you get a job and both of you sell these dumb but crazy cars and go get you a one-bedroom apartment. Get you two $5,000 cars and then you have $10,000 in car debt instead of $50,000 in car debt. That is your problem. And you do nothing. That's what's causing you to be in the lower class living in your mother's basement, not penny stocks. Okay, that definitely makes sense. You lost $50,000 on these cars. You lost $30,000 on the penny stocks.

Yes, absolutely. For reference, I had seen it work in the – but I'm definitely not going to miss it anymore. I did have a question as someone with all your experience. If I'm not investing in like the riskier, the penny stocks or call options or anything like that, do you have a investment, like, recommendation for when I build up? Yes, he does. Okay, so the number one wealth building tool that you have is your income. You have given that away to the car companies.

And so in order to be able to be a real investor and become wealthy, like the wealthy do it, you have to put your income into investments. And it's not speculative and it's not high risk. And I put mine in basic growth, stock mutual funds. Okay. I'm going to send you a copy of the book, The Total Money Makeover. 20 million people have read this book. And it's helped them work the baby steps to get out of debt.

Because when you're out of debt, then you're freed up to start doing long-term investing. Kevin, how much do you guys pay in car payments each month? Um, I think about, about 1200. 1200. Okay, so here's what's crazy. Here's the mindset, okay? Instead of paying the car companies, you pay yourself that 1,200. From age 30, ready for this?

From age 30 to where you are now to 67 years old at a 12% rate of return, if you just put this in good gross stock mutual funds and did nothing. Not risky. Paid yourself these car payments instead of the cards. You would have $9.8 million at 67. And that's not speculative and it's not risky. It's what basic people do at a 401K. Yes, and the lie, Kevin, that you have in the back of your head.

So why you do these penny stocks is a get-rich-quick mentality. To build true wealth is actually very simple. You live on less than you make. You don't go borrow money. You pay yourself. So you are investing. You are saving. You have an emergency fund.

So when something comes up, you're not running to debt. You have the money saved. You invest. You're generous. So there's a plan which, yeah, the book, TMMO, So I'll send you that to try to help you. So the summation of the overall call is this. You're feeling 90% of your shame over the penny stocks and 10% of it on the cars. I want you to flip that. I want 90% of your guilt or shame to be on the cars so you never do that again because that's doing more damage to you than the penny stocks did.

And then the lesson you learned from the penny stocks is, you know, Abraham Lincoln said everything on the internet's not true. Okay, so just You read that on the internet? Yeah, I read that on the internet. So, I mean, this is, you know, so just got to know that most of the stuff on TikTok is a lie. Most of this stuff is. And if you're too, can I just say this too, sorry. If you're too well, well-bodied adults.

Both of you should be working. You should be working, especially if you don't have kids, right? And to get yourselves out of this mess and to get yourself on a financial playing field that you actually then have stability. And then you can make choices of, hey, I want someone home, I don't. But right now, you guys don't have that. luxury. That's a luxury to keep one spouse at home. You're living like you're making $200,000 a year and you're not. And so you're going to have to adjust your expectations of how this whole thing works. Love entrepreneurs. Don't forget, guys, I started my company on a card table myself.

So I know what it's like to have people counting on you, your team, your family, not to mention your customers. And when you're the one signing the paychecks, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, just fix it. And they did. We got NetSuite. That was years ago, and we've never looked back. See, NetSuite isn't just for tech giants.

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That's netsuite.com slash ramsey. Ramsey. Ken is with us in Mobile, Alabama. Hi, Ken. How are you? Hey, great. Dave. How are you? Better than I deserve. What's up? Hey, so I've got a quick question. I want to get your thoughts on trust. I'm retired. I followed your plan that I actually learned from my mother. But I've been listening to you for years, and it works. Well, thank you. So now I have a really good net worth. I have one child, and he just graduated. from college, and I just want to make sure that, as my wife and I passed this on to him, that it's set up, you know, protected from lawsuits and others type things.

And I've had friends say, well, you need to set up a trust, and I just want to get your thoughts on that. What's your net worth? About $3.5 million, including the house. Good for you. Okay. All right. We have our items, mainly in LLCs and a few of us.

of them in trusts, particularly real estate, each of our real estate properties that has substantial value. We put it in an individual LLC so that at worst case, you would lose that piece of property then, okay, if it was sued, okay? That's your worst case with that property. And so if you had a piece of property worth a million dollars and you got a $50 million lawsuit on it, you hand them the keys and you'll walk away, right? Right.

But they don't get everything else, and that's kind of your point. Ultimately, the thing that protects you much, much more than that is to teach your son, how to behave. You started with nothing, and you've acquired enough wisdom to run all of this. So he could learn to do that unless he's got a mental disability of some kind, does he? No, no, he's, but no, he doesn't. Okay. if he's just irresponsible and immature, you can't do enough to protect him from that. He's going to screw it up no matter what you do.

Is he can? What's his status? No, no, he's not, but he's a very kind-hearted person. And, you know, his thoughts are more in the social work history side of the house versus my background in accounting and finance. Yeah. Well, I think you can have some real frank discussions with him and say, in order for me to leave this in your care, you have to have a level of wisdom on how to handle it

because that's your job as the steward of this, because this is God's property, and I'm managing it for God now. You're going to be managing it for him later, and you're going to have to do that with wisdom. I mean, really, that's going to be 90% of your safeguard. 10% is your structure. Okay? So it kind of falls in the heading. You probably have heard this before.

I teach Entree. I teach small business people this all the time. time in contract law. If there is no contract in the world that is strong enough to not get to keep you from getting screwed by somebody who's a crook, they're going to find a way. Okay. Okay. And you can't just say, oh, but I had a contract.

Oh, but I had a trust. You know, and no, I mean, he gave it all away. He screwed up and he was kindhearted and he got exploited and he got conned because he had a lack of wisdom, that's going to happen. Whether you have a trust or not. Whether you have a trust or whether you have LLCs or no matter how you structure your risk management process, unless you remove all control from him and you put the control of all your assets in someone else's control called a trustee, and your son's not

allowed to do anything or make any decisions. And that's just not a very good life for him. Yeah, right. I've heard people mention that before, but yeah, I just don't go. I agree with you. That's not a good life for him, and it doesn't give him any responsibility. Yeah, yeah. And how old is he now?

20. Okay, good. Yeah, so I sat down with hours when they were about that age, and that's the first time they understood that we had built a net worth from having gone broke. And we said, look, first thing is, you know, we're Christians, and so as for me in my house, we serve the Lord. is not yours, it's not mine, I'm managing it for God. And if you don't leave this conversation with a sense of responsibility and heaviness, instead of a woo-hoo, I hit the lottery, when you start

to see what our net worth is that someday is going to be yours, then you didn't, I didn't do my job as your parent to this point, and I didn't do my job in this conversation. And we had that conversation very clearly, and to their credit, they all accepted it as a responsibility, as a privilege to get to manage this wealth for the good of the family and the good of people in the community. And one of the best elements of that is learning to manage just our life. We're not managing any of that right now, right? I mean, so learning to live within our own means of the jobs that, you know, we've chosen to take on the lifestyle, all of it. So yeah, there's a level of him that's going to be managing his life after college and you get to kind of be there with him in those conversations.

and that's kind of his practice run, honestly, Ken, before he gets handed all of this that you've built. No, the answer to your overall question is I would not put it all in a trust because I don't think it's going to accomplish exactly what you're trying to accomplish for the reasons I said. Now, is a trust for part of it, possibly a good place? Yeah, probably, just from general risk management. And it depends on how your wealth is structured, maybe some LLCs and so forth. That's true because I'm a very poor man right now. I own absolutely nothing. Even my cars are not in my name.

I don't have anything in my name anymore. It's all in the name of something else, and my wife is in charge of all that. So if she leaves, I'm going with her, because she's got all the keys. So, you know, I mean, that's, that's, you know, it's just you really can't get to, we've insulated our stuff in a lawsuit, happy world.

Give a high level of like what a trust is, a living trust, all the different kinds of people that structure. Because we get this question a lot about wills, should I, I mean, everything from that to insurance. Well, a lot of times people want to do a trust for different reasons than can. Okay. They want to do a trust to avoid probate. And probate is the tax that your state has. Our state has a 3% probate. It's not much. So it's not that big a deal. And you do avoid probate by putting the stuff into a trust, but you have to move the title of everything into a trust. That's a living trust. Okay. And so you move everything in the name of a trust and you manage everything

out of a trust and you do that if you got a $2 million net worth so you don't pay, you know, $40,000 in taxes, which is just dumb. Because of the effort is what you're saying. It's too much effort. And most people don't, they don't ever fund the trust, meaning they don't ever move the title to their house into it. They don't move the title to their, open the trust. You have to put all the, redo all the titles to everything in the name of the trust.

Yeah. And if you don't do that, the trust is something they're empty. It doesn't have anything in it. And so you paid $5,000 to some lawyer that talked you're into doing this for nothing. So get a will is what you need to do. Yes. And then at death, you can form a trust. Or if you're doing like a massive piece of property or something, like we've got a couple of pieces of property, there are hundreds of millions.

Well, there was a guy he called in last week, and it was a Southern California property that his grandfather left them. And it was like a 10 million, it was something. It was millions and millions of dollars. And that was in a trust. Okay. And that's fine. If you want to do that, that's fine. But the problem is it's the stuff that we have in a trust in the Ramsey's, it's trapped.

you guys aren't going to be able to sell it. So the things that we're not sure you're going to want after I'm gone, we've left that in just LLCs because y'all may deal some of that stuff. But there's like this property is in a trust where our offices are, the campus. Because you can't sell that. You've got to run the office out of it. So run the Ramsey out of it. So, but there's a few things like that.

But the rest of them, you just don't want to handcuff people from the grave in an effort to force them to do weird stuff. So teach them. while you're alive what you want them to be and that's that's your fix for most things um and if you're trying to manage risk and while you're alive you know moving some stuff we don't put more than about five million dollars or a single piece of property depending on the size of what's going on into an LLC and so like we've got enough houses in an LLC gets to five million and then we quit you know and you know we don't have that we've only got about 25 houses now we don't have many we

used to. But we would not let the LLCs get too big because they don't have too big a target on them then. But that's a, that's not a death after death thing. That's a while you're a live risk management thing. Right. Right. Yeah. And so, but as far as after death goes, a trust is freaking forever unless you put a termination date on it or a methodology for terminating it is part of the term. That's part of the trust. So it's, and most people don't think that through when they do this. So I would go to the source and fix the source first, which is training up your boy, and then go from there. This show is sponsored by BetterHelp. I am here on this show because some amazing women in my life, like my mentors, my friends, my wife and my mom, because they

invested in me. They're all extraordinary. And one of the common themes I've heard from all of the important women in my life is that between the responsibilities and expectations that the world places on and the expectations they place on themselves, they are under incredible pressure every day. Women are often encouraged to overlook their own emotional well-being to care for everybody else. Therapy offers a space for women to learn how to navigate those competing expectations, learn how to set healthy boundaries, and learn how to communicate what they want and what they need. To do that, I recommend BetterHelp. BetterHelp is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. You can message your

therapist in schedule sessions right in the platform. And with over 30,000 therapists, they have the right person for you. And if the first therapist isn't the right fit, you can switch anytime at no additional cost. Your emotional well-being matters. Find support in therapy. Visit betterhelp.com slash ramsie to get 10% off your first month. That's BetterHelp, help.com slash ramsie. Melinda is in Phoenix. Hi, Melinda. How are you? Can you hear me okay? Absolutely. What's up?

So much. I just love what you do. And we just started Financial Peace University like two weeks ago, so we're very new to this. Very cool. Well, welcome. We're glad you're here. How can we help you on your journey? Well, I'm hoping you can help put out a fire with me and my husband because we've been going back and forth of this.

Oh, we love to settle a debate, Melinda. We are here for it. Oh, that would be great. So we are going through the steps. He is on baby step number one, which is putting $1,000. and his starter fund. I already have baby step number one covered. I have about $6,000 in my personal savings.

However, we have a joint savings account that has $2,500 in it. Now, I have asked my husband to not touch our joint savings because it just gives me like a little bit of peace of mind of being able to cover like one month's mortgage and some bills if something happened. He has said, well, wait a minute, Melinda. if we just take our joint savings and we've each 50-50 put into it, you take 1250, I take 1250, then I have baby step number one box checked, and then I can go on to paying my debt off. He has a lot more debt than I do.

I don't have that much, but he has a bit more, so he's kind of eager to start paying it off. And I'm pushing back on him saying, no, I want to keep our joint savings, pretend that's not there, and you figure baby step number one out without that. And he said, why don't you ask Dave? Melinda, in 30, almost 40 years of doing this, the couples that do it the way you're trying to do it fail. Oh, they do. He said ask Dave. He's like, why not Dave if we can touch our joint savings?

So the couples that actually win and go all the way to being millionaires, when we did an actual study of millionaires, we asked them the same thing, work 100% joint. they don't have any years in mind, only hours. And so I would take all the debts and put them in one list, all the savings and put it in one list. It's not your roommate, it's your husband. And that's what we've seen to be very, very successful. It has the added benefit of creating synergy and the other added benefit of creating massive amounts of communication and values alignment because you really have to be. have to force yourself to work together because everything's together. And then there's this

unity that comes in the relationship that you didn't even see coming. So consequently, what we end up hearing, and I first heard this, I don't know, decades ago, I'd be teaching Financial Peace University in a live setting. And people would say, oh, this saved our marriage. And I'm like, what? Or made our marriage way better. And I'm like, what? Sex class was down the hall. I mean, come on. And they're like, no, you forced us to work together and align our values and have one account and one list of debts and one life and it forced us to create a unity in our relationship and a communication level in our relationship that we I didn't do it for that reason I did it because it was practical but I've learned later now in retrospect all these years later that it has all

these added benefits to the marriage as well as really increases the probability of you winning Rachel you get a lot of criticism when you tell people to join accounts yeah some people hate that They love having their separate thing. But that's it, Melinda. I mean, there's a logistical piece to this, and then there's the actual benefit to the marriage that you guys are together. And how much faster you guys can win? Okay, so you just threw out some numbers. I just want to use it as an example.

You have how much saved? $6,000, did you say? I have $6,000 saved. Okay. And then you have $2,500 over on the other end, right? And then does he have any money saved? He doesn't have it, right? He's working on his thousand.

$25. Okay. Perfect. Okay. How much debt do you have, Melinda? I have $5,000. Perfect. Okay. And then how much does he have? $19,000. Perfect. Okay, great. So the beautiful thing is, if you do the baby steps the way we've said, okay, you're going to have your emergency fund done tonight. Your debt's going to be paid off. And then you guys are going to have a thousand or two left to hit his debt.

So it'll be down to $17,000. And you guys working together. What's your household income? Well, that's why I'm not taking my savings and paying off that credit card because I literally, I make more money than him. No, no, we have an income. You don't, we have an income. Oh, we have, well, I literally just lost my job. Oh, that's okay. So what did you use to make?

I've 12,000 a month. Okay. And what did your husband use? What did your husband make? He makes $4,000 a month. Okay. And what were you doing? I'm freelance.

So I'm a consultant. And I'm not worried about getting clients. I'll get back up to 10, 12K in a month. Okay. Then there's nothing to worry about. Do you have an issue of his work ethic, Willenda? He works Monday through Friday really hard. Okay.

But he's kind of like he works in the, you know, he works also with his best friends. So it's kind of like fun and play. And they're building something big, but they keep saying they're going to have this big return. And it's been like two years. Okay. So I think they don't have that yet. So this is Exhibit A. When you.

No. No, I get it. No, listen, this is exactly why we say, pull your money together and work together, because what ends up coming out of that is life. And what ends up coming out of that is your questioning, holding your breath, fear around what he's doing over here. And if you guys haven't even been aligned on that or had dates of, hey, if it doesn't hit this, then we need to move on. Like, nothing is aligned within the family unit, right? He's kind of off doing his thing. you're doing your thing, and that's how you guys are living. And when you actually force yourselves to work together,

some of these conversations that can be really hard, but actually very beneficial to your life and your marriage, end up coming up that you have to hit head on. Okay, I would suggest that you guys begin talking about this idea of combining all of our savings, combining all of our income, and combining all of our debts list. I would not start your total money makeover today. Keep going through Financial Peace University,

but I would not take you down to $1,000. When you get $5,000 worth of clients back up, which is probably two or three weeks from now, right? Mm-hmm. Okay. When you get that, then push play on this. And I want you to clean out all of the savings, except retirement,

down to $1,000 and pay off your debt and start paying on his $19, which are both now our debts and our savings and our income and our household. and our house and our car and our goals and our goals for career goals and I mean all of that and your business that you're running is our business and um I'm uncomfortable uh I don't mind you having fun over there but I do mind you having fun over there while you're not hitting good income goals that's starting to bother me and we need to talk about that out loud and and you know I need

talk about the fact I'm a little bit scared right now I just lost my biggest client and I'm down to zero and I don't like being there. And I feel like I'm doing a lot of the work and putting a lot of the effort. I don't feel the same from you and that's scary to me. I mean, all of it. It all starts to like. It doesn't mean that it's the end of the world or anything. We're not ending anything. But what this forces is this, like Rachel said, this tremendous level of communication in depth. Because it's going to be, you're going to have a painful three or four weeks here. Because if not, the resentment. So people that just push things under the rug and they compartmentalize and say, well, that stuff's over here here. The resentment starts to build up.

And then you look up 10 years from now and you're like, we've never even have, we've never even talked about this of how I've been feeling because I haven't had to because I've kept all my stuff over here. So what the, it just kind of forces kind of the junk up, which is not fun. Not fun. You're going to have a hard three weeks. But it's going to be, but you're going to look back on all of this and you're going to have a, yes, a deeper, more cohesive marriage because of it, because of it. Yeah. And as you get further into financial peace, you're going to hear this language a lot that you change your pronouns, not in a woke way, but in the, a way that says it's we. We do this. We do that. My wife Sharon has not worked outside of our home

earning an income since our oldest daughter was born who's 40, but we have an excellent income. We have a lot of assets. We have done very well. And I would not have been able to do it. Were she not keeping the home fires burning? Were she not a low maintenance, low drama person? I would not have been able to work as hard as I've been able to work. So it is a we. It's a week. Absolutely. And I have zero resentment that she did not do an income during that time.

It was our decision for her to do that. Melinda, I'm excited for you all, though. I know you're new to all this. But honestly, I'm pumped to see where you guys are going to be. You're going to do amazing. You're hard worker, you're a charger. I can hear it. And you guys are going to be awesome.

So call us back if you have any other questions. And here's the thing. Try it. You can always go back to the old way. Try something different. Running a business is hard work. You're the CEO, the accountant, and the sales team. You don't have time to moonlight as your own benefits department.

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I'm Dave Ramsey, your host, Rachel Cruz, Ramsey personality. Number one bestselling author and my daughter is my co-host today. Mike is in Boston. Hey, Mike, how are you? Hey, you doing good, Dave. How are you? Better than I deserve. What's up? Thanks for taking my call. I've got a situation with a solar system that I wanted to get your feedback on.

I bought a home last summer. I had a solar system installed that was financed and warranty it through a company called Sonova. Part of the pricing was originally inclusive of a long-term, like roof penetration, leak warranty, and a power production guarantee. Long story short, a couple months into my home purchase has started leaking. So I had to have the system removed and ultimately had the whole roof replaced. to make matters worse during that time Sinova went bankrupt

and a company called Sunstrong took over the lease but unfortunately they claim that they are not responsible for any of the warranties or guarantees going forward so currently I've got about $50,000 balance on the loan and all the solar panels are in my backyard

so I'm trying to get your feedback on what the best next steps would be should I just take it as a dumb tax and pay it off or would you personally have them reinstalled and just know but any future roof leak risk is something that I'd be taking out personally. Wow. What a mess. Well, a couple things. I would probably gather some information from an attorney to be sure

exactly where you stand on this, but I think you've assessed this correctly because I think the warranty was probably offered by the company that went bankrupt, and so the warranty's worth nothing. The lease, which is where you financed the, solar panels is a separate contract and that money stands separate of that warranted guarantee although morally it shouldn't but I think that's probably the way this is structured legally and so now I will say that the interesting situation the people that did buy the paper that you know the people that you owe the money to on this lease they are probably having all kinds of problems

collecting on a whole bunch of this paper In other words, this is some bad, a bad deal for them, because they probably have a whole bunch of you out there. You know what I'm saying? Not necessarily proof leaks, but everything else because they bought paper or they financed for a company that in turn went bankrupt. And now you've got a whole bunch of dissatisfied customers don't want to pay this bill. So I suspect you're not the loan ranger on this. I bet you they got this every day in mass they're dealing with. So having said that, do you have any money?

Yeah, I mean, in the payments like... No, do you have any money? Yes. How much money do you have? I have enough to pay it off. Okay. So you have over $50,000 in cash that you could use? Yes.

Okay. I would call them and tell them I'm going to sue them because they're the only one left standing in a bad situation where my roof leaked and the solar panels are laying in the backyard. They can come pick them up if they want them. or we can try to settle this, and I'll give you $10,000 to pay it off and start there and buy this note out at a discount. Yeah.

Because the note is. It's interesting because it's a loan. I know it is a lot. The original contract, yeah, the original contract for the loan, the pricing was solar plus warranty. So to the original buyer, the people that own the property before me, it was packed. and when it was transferred to me for that matter, it was packaged as a package deal, and this is the pricing. So I would just, I would, I would just say, this whole thing's a piece of crap. You bought crappy paper.

You know that. You know you're not going to get paid out on it. So I'll give you $10,000 and we'll call it a day. Yeah. You're not going to get out of that and law your fees cheaper than that. Yeah. And then you're going to own the solar panels and you can either throw them in the dump or you can put them back on your house, your choice. But right now what you've got is not a solid.

problem, you have those $50,000 problem, and I want to get rid of that. I think they're going to take a discount. I don't know if they're going to take 10. They may come back and say 20. If they do, get it in writing, and write them a check and be done with them. Okay. Yeah, I've got kind of conversations ongoing. The last time I spoke with them about that, they said the price was $50,000 even today, even though it's financed that less than one percent. Well, and let me help you with this. I'm going to sue you. Yeah. I'm going to sue you, and you're never going to get any of this because you, You people screwed me, and you're one of the ones that screwed me, and I'm not going to tolerate it.

So if you think you're getting $50,000 out of me, you're confused. Sure. Because they screwed you. All right. For sure. I mean, that's what it feels like. Yeah. And you need to go see a lawyer and talk to a lawyer and find out exactly what your rights are in the state of Massachusetts.

I am not a legal expert. But this is how I would handle the business part of it and the relational part of it. and you're, you know, you're being moral, you're being honorable, because you got screwed. Giving them a dime for a trash that's laying in your backyard is more than you should have to give them. Oh, with the damage, too. They should just pick up the trash and call the note off, but they're not going to. Yeah. And it's going to cost you more than 10 grand to get in a lawsuit, promise you.

Yeah, I can't imagine. Yeah, so I don't want you to go there, but I really want them to believe you're going to go there. Yeah. Okay. All right, well, I'll just have to... Yeah, double up your fist and bust them in the nose. Get back on the call. Yeah, just bust them in the nose.

Just hit them hard. I'm serious. Don't be nice about it. Do they hold the loan, the company? Yeah. They're the ones. What happened was the paper was sold and then they went bankrupt. Yeah, yeah, yeah.

But the new company holds the paper. Yeah. But I'm saying, yeah. But they bought paper that they knew was bad. Yeah, yeah. Because they bought it from a company that was going bankrupt and it screwed a bunch of other people. Sinovus is clad. I mean, they're like a case study in screwing people.

It's not... Sorry, Mike. I'm sorry you got taken. And it's a mess. And then you've got to decide if you want solar on the house and whether you want the roof to leak and all that of the bull stuff. That's a whole other discussion as to whether or not it's going to be worth screwing with. But might be, might not be. But that's where we get to.

Wow. What a mess. Wow. All right. Up next is Michael in Minneapolis. Hey, Michael. What's up? Hey, Dave.

Hey, Rachel. How are you guys doing? Great. How can we help? Good. Just to say first, we have no consumer debt, and the only thing we have is our mortgage, $155,000. It's about $1,273 a month. And to start off, I have an opportunity where I can go back to school to be an electrician.

I wanted to do that back in 2019. I left it for some dumb reason, and I got put in a wait list. I now have the sales job. I'm making $65,000 a year plus commission. I've been doing that for about a year now. and we just got done with this debt, all of our little debts, and it just feels like... How much does it cost you to go to school? 15, the max, 15,000.

Okay, and can you work while you're doing that? I'm going to work part-time, yeah. My wife works full-time right now. What does she make? $20 an hour. $23 an hour. She just got the job. I don't know what that.

That's not much. And so what are you going to be making part-time? That, I haven't looked into that. I just got this email about a week ago, and we've just been boggling our minds on this. What would happen if you went to work for an electrician's company and they paid for you to go to school while you worked for them? There is an opportunity for that. But they're on a wait list, too. I don't know how long that would be.

I don't know why all these wait lists come from. We have a shortage of trades everywhere in America. So I don't know whether you're trying to do a union deal, and that's where your wait list is coming from. do, then bypass the union and just go become an electrician son and let somebody pay you while you're doing it. But I think you need to pursue it, but in a smarter way than you're outlining right now. Yeah, as long as you can cash flow and you guys can keep your head above water financially for two years through the school and you're going to be making more than what you're making now, probably consider it. Hey guys, George here. Listen, 99 times out of 100 when people say,

I don't know where my money goes. It's not a math problem. It's a behavior problem. They're not budgeting, then they're shocked when their bank account hits triple zeros. Well, here's the deal. Winning with money is about doing the boring stuff consistently. And that includes banking someplace that helps you stop guessing with your money, like Fairwind's credit union. They're not going to fix your habits. That part's on you, but they do support people who are ready to take control of their money. At Fairwinds, you get a high yield savings account with a great rate to help grow your emergency fund, a checking account that won't nickel and dime you, and up to 10 free savings accounts so you can organize your money on purpose. Because when you stay disciplined,

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vetted by the Ramsey team and are Ramsey trusted. Claire is in Salt Lake City. Hi, Claire, what's up? Hi, thank you for accepting my call. So me and my husband kind of got ourselves into a situation with a vehicle. We bought it when we were living with my mom, and we thought we could afford it. And now the payment's ridiculous, and we just don't know what to do about it. How much is the payment?

It's $1,300 a month. How long have you been married? A year. Okay. $1,300 a month. Yeah. Every time it pulls, I want to cry. And what's the, what's the, what's the,

What's the truck owed on it in total? We owe, I want to say, 52 or 58 somewhere around there. First thing you need to do is call. Who's the truck financed with? I honestly, I don't remember. Okay. Call them today and find out what the payoff is if you pay it off this month. Okay.

I think we checked it the other day and I think they said it was like 56. Okay. That's what I was. asking you what you owed on the truck. Oh, yeah. And you weren't sure. So you're sure you checked it the other day? Yeah, I checked it this month.

Okay, $56,000. Do you have any idea what the truck is worth? Yeah, I checked today. It's worth like $34. According to who? Kelly Blue Book. On private sale, trade-in, or what? Private sale.

Oh, golly. When did he get the truck? How long ago? He bought the truck. two years ago, I want to say? Did you have a car that was upside down and you rolled the upside down amount into this deal? No, we bought when it was really high. We bought a truck for like, I don't even remember.

What's your interest rate? Ridiculous. I think it's 17%. Oh, my gosh. Okay, your 56 is not your payoff. That's not the right number. That's the balance. That's not the payoff. Because you have a subprime loan and they're giving you the total.

of all your payments left. You're not that far upside down on this truck. Okay. Be more what, like fit, like what we're going to? What I want to know is what the payoff is today, not what the balance is today. When you have a rip-off subprime loan, they book the loan as the total of all remaining payments. That is not your payoff.

Your payoff is not the total of all the payments because it doesn't include all that interest. So your payoff is probably going to be 45. You're probably 10 in the hole, give or take. Now, what's your household income? Our household income is, I'm sorry, I'm trying to think, like, 56th a month. Okay. And what do you make?

I make, I'm at $19 an hour. And what does he make? He's at 2670. Okay. So you guys bring home $5,600 that hits your account after taxes? Yes. Okay. All right. And you're working 40 hours.

Yeah, he works overtime, though. Okay. In addition to that, okay. Yeah. All right. Okay, and I'm assuming you have no money saved. So we've been working on the babysat, so we have $1,000 saved. That's good. And we've been paying off.

Oh, the debts. He just got a big bonus, so we paid off a bunch of our credit cards. How much was that bonus? It was like $3,000. Good. Okay. Do you have a tax return coming or do you know? I don't have a very big tax.

I have like $100 coming for my tax return and he has maybe $1,000. Okay. All right. Because you desperately need to get rid of this truck, completely get rid of it. And you're going to have to pay the difference to do that. There's a couple of ways to do that. We want to save up. Let's say your $10,000 in the hole as an example.

You'd have to have the $10,000 to put with the $34 to get the thing paid off and get rid of it. The second thing you can do is you could finance that $10,000. Okay. I'm worried, though, because we live in a camp trailer, and so we need the truck to pull the camp trailer. Sell it all and move into an apartment. This is killing you. You can't keep this ridiculous butt truck and have some irrationalized reason for doing it and live in a camper. You're dying over here. You got to sell the camper too. What's the camper worth? The camper is worth I just looked at it It's worth 54,000

And what do you owe on it? We just bought it Oh Jesus Oh my God And so you financed it, of course Yes And you owe $54,000 on a camper Yeah

Yeah, we owe 54 Okay We're to sell everything, Claire Yeah, if I woke up in your shoes I would sell everything in sight, and I would clean up this mess, and it's going to take you a year to clean up this mess, renting a little one-bedroom apartment, and you're going to work like crazy people all the time, and you're going to have no life, and it's going to take you a while because you've made some really, really bad financial decisions. This truck and this camper are the top of the list, and you've got to get this off of you.

Five years from now, you're going to have two pieces of junk and still owe $0.40 grand. Okay. And you're still be living in a dad-gum camper. This is not a good long-term life plan. No, so the plan was we bought the camper because we're fixing up my dad's old house that he gave to us. And then you're going to sell the camper at a loss. Yeah. So you should have moved in an apartment while you're fixing up the old house.

Instead of buying $54,000 or something that's going down in value like the toilet. Yeah. Yeah. So that's the plan. So now you're fixing up the house with money you don't have. Yeah. Yeah. How much you're putting into this house?

Well, so my dad said he would pay for most of it. We haven't put anything into it yet. Good. Is he living there now? My husband's doing, no. He has his own house. Okay. My husband's doing all the work on the house himself.

Is the house going to be put in your name or is it in your name? Yes. Already? It's not in our name yet, which is why we haven't put any money in it. Okay. Don't put money and effort into it. until it's in your name. And you've got to start undoing some of these things. So you've got, you all got a mess. And I'm scared for you. So, but you've got to back up and rethink how these

stories end before you enter into the story. And so we need to begin with the end in mind, as Stephen Covey said, and The Seven Habits of Highly Effective People. And you don't buy a $54,000 camper to sleep in that's going to be worth 30 by the time you get ready to sell it a year, now in order to fix up a house, you could have used that money to fix up the house. And so, you don't, you got to quit buying things that go backward on big payments. And it sounds like you're sacrificing in your head, but you're not sacrificing. You made a mistake is what you did. So you guys have got to get rid of this crap. And, you know, if you can get that house barely habitable and move into it. That's, I was going to say, that's, that's a, that's a bright spot in

story. Yeah, you know, even if it's not nice, even if the, you know, if the bathrooms on one end don't work or something, I don't care. If you can get it where it's legal to live in it and the plumbing is functioning and you have a, you know, a basic kitchen to operate out of and you can fix it up later and get rid of the payments here and start dumping all this stuff, this crap that you've got with wheels on it that's going down in value. Okay, folks, a general rule of thumb is this. not just for her, but for all of us. If you want to be poor, here's the formula. Buy a lot of stuff that has wheels and motors on payments.

Boats, C-dos, four-wheelers, motorcycles, cars, trucks, trucks, trucks, lawnmowers, buy a lot of stuff with motors and wheels and put payments on it. And you will be poor. If debt collectors won't stop calling and you feel like you're drowning,

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Go to Guardianlit.com slash Ramsey. That's GuardianL-I-T-com slash Ramsey. Atcerning advertising, results may vary and no specific outcomes guaranteed. Today's question of the day is brought to you by Y-R-R-FI. If defaulted private student loans are wrecking your budget, it's time to deal with them. Why-R-Refi helps you refinance defaulted, private student loans with a low fixed rate payment based on your ability to pay so you can stick to a budget and work the plan. Go to y-refi.com slash ramsey. That's y-re-f-y-com slash ramsi might not be in all states. Today's question comes from Lauren in Maryland. She said I'm a married woman in my 50s with $25,000 in debt that my husband doesn't know about. I started a part-time job

and I'm slowly paying it off. I grew up in a middle-class family. And my mother was always trying to save a dollar, which drove me crazy. My husband is a good man who makes about $175,000 a year. We don't have a mortgage and have about $1.5 million in retirement. We have a healthy retirement investments, and our parents have set up $5.29s for our children, so college is set. I like to buy nice things for myself, but I feel terrible about the way I've handled my finances. Should I continue to pay this off myself or come clean and tell him about the debt?

Oh, Lauren. Well, to answer your question bluntly, yeah, I would come clean and tell him about the debt. Not only can you guys get this cleaned up together, but also carrying around a secret like that and functioning at that level in your marriage is going to erode not only your marriage, but also you. You can't carry that stuff. I mean, secrets is what erodes trust in a marriage. And so you carrying that is not being a person of integrity. being fully honest. And so that's going to be, that's going to be a hard, a very hard conversation. You know, people that deal with, with financial infidelity. And thankfully, you guys have the,

sounds like the margin that you're going to be able to take care of it. But, man, people that get stuck with this stuff. It does feel like a level of betrayal, sometimes at the same level of actual infidelity going on in a marriage. So I'm not saying it's going to be easy, Lauren. Yeah, I kind of expect your husband to be pissed. because you lied to him. So I think that, you know, I like nice things, so I lied to you. I don't think that's okay. No, it's not.

And it's not okay. And I think you expect him to be pissed and he should be. Not because of the money, but because of the deception and the lying. And that's some serious stuff in your relationship. So, yeah, you need to come clean yesterday, deal with whatever the consequences are. It may put you on the marriage counselor's office, which would be okay with me. then the second thing is, is that you can afford nice things. Yeah.

But you can't afford to do it under the table. Hide the target bags under the bed. That's not funny. This is a grown woman. And you're 50 freaking years old. It's time to act like it. So, yeah, you and your husband need to sit down and have an adequate budget for you to buy some nice things. And part of it was you grew up in a tight household where they didn't have any money.

And so your husband makes $175,000 a year. You want to have a nice dress. That's okay. I want 14 nice dresses. No, then that's something wrong with you. Well, that's what I was going to say at that point, yes, where she is, I'm like, there's stuff inside of you, Lauren, that's coming out sideways in the form of money. Yeah. For some people, it's other things that they sit there and Medicaid with.

But some people, it is. It's the spending. It's the money. And so figuring out what that is for you. for yourself to get healthy is going to be a gift later on to your marriage. But yeah. You know, so we can afford to do a lot of things that we choose not to do because in our minds they're ridiculous.

But she and I, Sharon and I choose to do that together. And then there's some things that we choose to do that other people think are ridiculous. I don't care what they think. It's not their money. And so we just buy that because we want to and we have the money, shut up. And so you can do that, but you're in agreement on that amount. And so my wife wants to do such as such in the redecorating, which is a constant budget line item. And so, you know, but at least we know what it is and we're doing it together.

And it's a reasonable percentage of our world. And it doesn't mess up everything else. And she gets to enjoy that thing that I don't even understand. And so that's okay. I can do that as a husband. She can do that as a wife. But we can be on the same page. And it's a line item in our overall plan.

and there's room for it. And I think that's the case here. There's room for you to have some nice things. But not by hiding them. So, yeah, you need to come clean today. You need to expect him to be not about the money, but about the lying, for him to be really pissed. I don't know of anybody that wouldn't be. And so, you know, and you've broken trust, and it may take a little while to rebuild that trust.

and it may take some time in a marriage counselor's office, and that's okay. I wouldn't mind that for y'all at all because there's a lot of stuff going on here that needs to be fixed. But yeah, but the way you all have been handling money as a couple has not allowed you the freedom to speak up and say, I want to buy something. Yeah, and it's either that you have an issue, Lauren, that you have to live below your means and you don't like that. And so you go off and do whatever you want and go charge it on credit cards. That's your issue. But then on the flip side, he could be kind of a jerk and, like, shaming you ever every purchase. You're like, I don't want to deal with that.

I'll just come over here and do my own thing, too, right? Which is an issue, too. Yeah, but the way you're handling money as a couple has partly led to this. Either you're not speaking up or him putting his thumb on it or some of both. Somewhere in there. Taylor is in New York City. Hi, Taylor. How are you?

How are you? Better than I deserve. What's up? Thanks for taking my call. I have a quick question. and I've gotten a lot of differing opinions on. But basically, should I stop contributing to my 401K while I'm paying off my debt? If you're working the Ramsey Baby Steps, there's not varying opinions.

There's only one. There's only one way to work the Ramsey Baby Steps. And Baby Step one is save $1,000. Two is temporarily stop all investing and completely focus on your debt snowball, paying minimum payments on everything but the little one, and attacking the little one. with a vengeance. That is blasphemy for those of us that know how to do math,

and we see that we're losing that compound interest and maybe missing out on a company match even for a short period of time. It's very hard for those of us like me that are nerds to do that. But we have found that the power of focus and complete commitment to becoming debt-free by both of you, you and your husband, to the point that we're stopping the 401K completely, we're stopping, saving completely, temporarily, that focus, that level of intensity is what causes people to complete their get out of debt journey. Those that play footsy with it and try to do

three things at once, don't pull it off. Ish is a wish. All right. Thank you. Okay. So I don't know where you're getting varying opinions, but they're not from our materials. No, no, just people in my life who I'm like trying to figure it out. Yeah, broke people have a lot of opinions about money. Yeah. Oh, thank you. I appreciate it.

Thank you for calling. It's hard. I think that's probably, I think that's... If your broke friends are making fun of your financial plan, you're right on track. You're doing good. If your fat friends are making fun of your diet, you're right on track. I mean, come on. This is...

You've got to think about where you're getting your information. If you're getting your financial information off a TikTok, you're screwed. Yeah, but I will say the investing side, there are a lot of smart people that just say, hey, invest, like they wouldn't say to stop it. Like we do. Yeah, nobody does. We're the only one.

Yes, that's right. I know. And I do think that's one of the hardest parts of Baby Step 2 for people is to go in and actually pause the 401K. But there's a part of that desperation that's so emotional that actually drives getting through it. Yep. And so that's for a lot of people, the motivation. I'm pissed that I'm missing out on that.

the match. I'm pissed that I'm missing out on some compound interest. So I'm going to drive through this debt that much faster. But here's the deal. What little bit you lose during that time you make up for because you've now gotten muscular in the amount that you can put towards your wealth building because your most powerful wealth building tool is not compound interest. It's your income. And your income drives the engine of compound interest. And when you give all your income to camper payments, you can't win. I know, and the 15% maybe step four makes up for all of that what you're saying. A lot of people just go up to their company match and that's all they do for retirement. Well, there's 3% their whole life.

That's right. That's right. So the 15, you'll be fine. You'll be fine, Taylor, I promise. You're going to be a multimillionaire if you follow these steps exactly. Mandy is in Texas. Hi, Mandy. How are you? I'm doing well, thank you.

I'm excited that I get to talk to you today. You too. How can we know? I'm 63 and my husband is almost 66. I retired from teaching two years ago and my husband is semi-retired in the cattle business. We both chose to start Social Security at 62 and we have been debt-free for many years. But over the years, we have always avoided investing money in the stock market. We thought it was too risky. So we put it in CDs instead. And currently we have about 760. $25,000 in CDs ranging from 4% to 5%. And then two years ago, I ran across your show and learned a lot that I wish I knew a long time ago. And so a year and a half ago, I decided to take a chance. And with the help of a financial advisor, I had $51,000 in a deferred retirement account,

and I invested that in a growth-stop mutual fund. And at the end of last month, the rate of return was about 13%. For 13% from when? From a year and a half. It grew. In 2025, it grew 13%. That's what it had on the piece of paper. Well, the market went up 24%.

So I think you picked a bad fund. Okay. But either way, Mandy, you're doing that. great. Either way, you're doing way, you're doing way better than 4%. On the right track. Yes. So here we are. I can see that even though that might not be the best things for a financial advisor to do for us, I can see that growth stock mutual funds can earn more than CDs because 13% is more than 5%. Exactly. So, but here's my dilemma. But we're, but with us being in our 60s and having this being in it for the long haul, we are just hesitant to move every cent that we have in those

CDs into mutual funds. And so we want to move some. Because you like making $40,000 instead of $140,000. We're just. Why are you hesitant? Because it's all we have. I know. But I mean, because you think you're going to lose it all.

I think I might need some of it. Well, you can just get it out. Okay. If you take it out of the CD, you can take it out of a mutual fund. Okay. All right. It's not trapped. Deferred comp is trapped, but mutual funds are not trapped.

Okay. So in this stage of the game, you would suggest that we take it all out of our CDs. Are you living off of the money from the CDs? No, we're not. You're not touching it. No, I haven't touched it. So what would you want to take it out for? Well, just in case with health-wise, we need it.

So if we had a health event, we might need $100 grand. Well, maybe for nursing home or I don't know where my kids might put me. Yeah. I mean, so what you need to do is you're dealing with the emotion, but what we need to do is put the reality of how a mutual fund works against that emotion and say how does this keep? me from touching that itch. Okay?

So, for instance, if the emotion is I'm going to lose everything, the only way a mutual fund would go completely broke is if 90 to 200 of America's top companies all became worth zero, which means that America is over. That's never happened in the history of America. Yeah. The entire economy has collapsed to zero, if that happens. Because what we're saying here is generally. Motor Motors, Alcoa, all the banks, all the Home Depot's, Apple, Tesla, everything is worth

zero. And then your 700 would be worth zero. So that's illogical. Okay. Okay. Now, do they go down sometimes? Yes, it goes down sometimes, but it goes up more than it goes down. Right.

And so let me just make you cry. Are you ready? Sure. In 2024, the market went up 26%. In 2025, it went up 23%. That means in those two years alone, you lost $400,000. Your $700 would be 1.1. Okay?

That's what this fear has cost you. So I'm saying that, not to say you need to go do this because I said do it, but to say you need to go learn about this. You and your husband need to sit down with a smart vester pro. Go to ramsysolutions.com. They have the heart of a teacher. Tell them, I don't understand anything. You're going to have to use words that I understand,

and you're going to have to teach me how these mutual funds work, or I'm not putting a dime in them, and you're going to have to make me feel okay. If I need the money, I can get it, and you're going to have to make me feel okay by showing me charts and graphs of the last hundred years that I'm not going to lose my money. Right.

You've got to learn. This is learning. This is knowledge. Right. It's I've never ridden a bike, so riding a bike is scary. But now, once I've learned to ride a bike, then riding a bike is not scary anymore. Mm-hmm. You've done a lot of things in your life that were scary before you learned how to do them,

but you learned how to do them anyway, the time you learned to drive a car, the time you married that man and didn't know what that was going to be like. All that stuff, right? Uh-huh. You're right. But you've learned about it, and you've got past the fear, and it's been a blessing with the knowledge. And so sit down with the SmartVistor Pro and learn, learn, learn, learn, and he needs to go, too. Don't do it because some financial advisor said, do it, or Dave Ramsey said, do it. Right. Okay.

But that's the numbers you're missing out on. So I want you to get, and if you decide, hey, we're going to put 100 a year in for the next seven years, we're going to wade in. Okay. Instead of jump in. That's okay. Yeah. You put 50 in already and you don't regret that. No, I don't regret that at all.

Okay. And you guys are young enough, Mandy, to, that you're going to have years, decades still. Yeah, there's a lot. A lot of time. There's a million and a half dollars on the line. You're not 92 calling us and you're scared of the market. At that point, we'd say sleep well, have peace and enjoy your life. But you're young, you know.

60. 60. Yeah, you're younger than me. 63. So, yeah. Yeah. So, Rachel, the thing about investing for anybody, including me, including you, is you have to learn about it. And then that keeps you from freaking out.

So when... Like yesterday, right? The market dove. Yep. When they bombed Iran, the market's back three days later. Okay. Those that get hurt on a roller coaster are those that jump off in the middle of the ride. So, you know, and then there's going to be something else that happens. And this year probably won't be as good as the last two years. I don't, I am not projecting, nor am I saying that mutual funds are going to produce 23 and 26%. I don't, that is not realistic. Those are two unusually good years. Okay. But I think we're going to make more than CD rates. And you have almost every year since the stock market's been there. It's almost always done better than CD.

rates. I do remember 1982 CDs were 12% and the stock mark, because interest rates were 17% on houses. Oh, yeah. And CDs were 12%. And I remember my grandpa having 12%

CD money market rates. And I'm like, oh my gosh. But that was 1982 in a highly unusual Jimmy Carter mess of the economy that we were in. With interest rates of real estate being, we complained at a At our 6%.

Yeah, yeah. Yeah. So that's, but most of my life, most of my working life, 50 years, CD rates have been, you know, 2 to 5%. Right in there. And the stock market has been 10 to 15% on your rates of return. But I don't get a guarantee. No, you have a guarantee. You're going to make less money.

That's your guarantee. When you're in a CD, you've got two guarantees. You're not going to lose your money and you're going to make less money. I'm guaranteeing you. That's going to happen. Barely keeps up with inflation at that point. Just barely, barely, if at all. Welcome back to the Ramsey Show in the Fair Winds Credit Union Studio.

Rachel Cruz, Ramsey Personality, number one bestselling author. My daughter is my co-host today. Michael is in Seattle. Hey, Michael, how are you? Honored to have you. How can we help, sir? Yeah, so I'm kind of a force of my life here. And I'm looking for some advice on what you guys would do if you're in my situation.

and currently I'm on a day-to-day layoff with my company. They're currently trying to get rid of about 40,000 of their workers, so they're offering severance packages. And where I'm stuck is do I wait the four to five years for potentially get full-time work, or do I take the severance package and attempt to start an entrepreneurship as far as either buying a house outright and collecting that cash flow and starting my own company, or should I invest that into like stock markets, dividends, that kind of better mutual fund. So I'm just looking for some advice on what you guys would do in my shoes and where you would go.

Okay, so it's fair to say the company you work for is not financially healthy if they're laying off 40,000 people, right? So the future there is not very bright? Yeah, yeah. I've been there for eight years since I was 18. a single father or four. So it's hard to kind of step out onto that limb. Yeah, I don't care. They're pushing you out on the limb because they're not doing well.

So four to five years from now is not looking bright. I'm getting about a day or two per week. Are you hearing me? Stop, stop, stop. I don't feel like you're listening to me. Okay. I'm saying your company sucks, so the future there sucks. Do you agree with that?

I agree. It's hard to pat and, you know, give up on that $100,000 a year. Well, I know, but you're going to have to give up on it because they don't want you there anymore, right? Yeah, I hear, yeah. There's a few guys that are getting ready to retire, so. So you're not laid off, Michael. You're just saying there's layoffs happening. But they're offering you, they're offering you a severance package to leave.

That's correct. How much? How much? It's $150,000 after Uncle Sam takes its percentage. It would probably be around. 100 grand. And you make 100 grand? Potentially, yes. So potentially, do you make 100 grand or not? I'm at 70,000 a year. Okay, you make 70,000 and they're offering you 100 to go away.

Correct. Okay. All right. That's our reality. Okay, let's deal with reality. And 100,000 is not enough to buy real estate, realistically. Okay, you're ending up with a bunch of real estate debt, so we're not going to do that with it. So if you leave this company making $70,000 a year and you put $100,000 in your pocket, what would you go do for a living? As of right now, we've got a family business going, so I'd probably push into that for a little bit, just kind of weighing my options. Out of necessity of getting an income, or because you enjoy the family business and you want to make that a part of your next career step? Yeah, I enjoy it, but as of right now, it is kind of a necessity, which, you know,

What are you doing right now? What's your job? I deliver. So I'm driving the commerce. I'm a full-time package driver. Oh, great. So who's the family business? Your parents? Yeah, I'm co-owner. So my parents, my sister and I are both the owners of the company. Do you make an income from that? I do, yeah. How much do you make of that?

I'm only going and helping them about. once a week, so roughly just a couple hundred bucks a week or a month. Oh, just for what you're being paid, not as you're not getting the bottom line or anything? No, we started about a year and a half. How old are you, sir? Okay. 26. Okay.

Let's pretend that you were 26 and could do anything you wanted to do in this world. Mm-hmm. And you weren't allowed to do the family business, and you weren't allowed to stay in the job you're in. and you could be whoever you wanted to be, what would you go do? That's a fair question, sir. That's what you need to be. 18, all I've known is being a father and providing. All you've known is landing in things by default rather than by plan.

Oh, there's a job over there. I can throw packages and I can make 70 a year. Well, he did it for eight years. And I could feed my family. Yeah. But you did not sign up for that because it was the joy of your life. You signed up for that as a provider, as a father, as a husband. husband and a good man and a hardworking guy. But you didn't sign up for that and say,

this is the, this is going to give my life meaning. I'm going to make it big. I'm going to go make 700,000 a year doing this. You didn't have a set out to live a dream. You backed into something because you had to have a job to eat. And you're a good man and you're not afraid of work. Okay. So I'm challenging you just take a step up from that. This is your opportunity to reset and land in something that makes 200 grand a year. And maybe you have to take three, classes to learn how to do it. I don't know what it is. Or you start your own thing with some of that hundred grand, or you take a class with some of that hundred grand. But this is your opportunity to say, not just because something's convenient. I'm not going to do it because it's convenient.

Family business is just convenient. It's you backing into something else instead of walking head first into something else. Yeah, hold on the line, Michael. Christian will pick up and we'll give you Ken's book, find the work you're wired to do. Because there's a great assessment in there, just to kind of get those wheels turning for you. Yeah. But this probably is a great opportunity. I want you to dream, though. And I would not invest or do anything with this $100,000 right now.

I would just put it in a high-yield savings account. I wouldn't even take the package right now. I'd figure out what I'm going to do first, and then I'd take the package. Because they're letting him stay, and they're going to keep offering the package for a while. So I'm going to take the next six months and do Ken's assessment. I'm going to decide what I'm going to be, and I'm going to start taking steps into that thing that I have always wanted to do X, and now I'm going to go be one of those. And what must be true for me to do that, as Henry Cloud says, and we're going to walk right

into that, and then take the severance package and then use the severance package to go live your dream. But no, I would not work at the family business, and no, I would not stay at this company that wants you to leave. But I would for a little while, while I get reset and figure out what my dream is and what it has to happen for me to live that dream. You looking at buying real estate or dividend stock. That's just you looking at crap on the internet looking for something to do.

Well, and to earn some money. I mean, you get your years worth of salary or more, hand it in your lap to someone like him. And he's like, holy crap, how can I make this money work for me? Yeah. Which is a fair question. But that's the wrong way to go about it right now. Until you have a steady income. Then you could take that and invest that later.

Exactly. But I would be having a monthly income first. This $100 grand is not going to make your life. You're going to make your life. You're the secret sauce for your life. That's the thing. So hang on, Christian will pick up. We'll get you a copy of that.

Finding the work you're wired to do. Take that assessment. Read that book carefully. Read or listen to anything Ken Coleman says, and it'll get you on the right track doing all this stuff. He's one of the Ramsey personalities for those of you that don't know. But it specializes in this area of living your dreams and doing this stuff. Okay, well, here's a question.

They haven't let him go yet. No, sit there for a little while. But what if he's loving it? and he starts making more, would you not stay at a company that's laying off 40,000, regardless? Because there's no future. Yeah, but what if the 40,

laying off the 40,000, props them up for a little bit longer? Yeah, it props them up for a little while longer, but I'm not hanging around a place that's going down the toilet. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming.

Well, here's the good news. You don't have to tackle the process alone. Ramsey's real estate home base is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to ramsysolutions.com slash real estate. That's ramesysolutions.com slash real estate. If you're working the baby steps, the best and fastest way to do it is by using every dollar

because every dollar will guide you not only in a budget, but right through the baby steps, doing this the Ramsey way. The plan is built into it. You track your progress. You get personalized recommendations, coaching for your particular situation. You free up more money. You work the plan even faster. You're working it together with your spouse. It's like having one of us walking with you every day showing you the next right step, do this, do this, do this, and then holding you accountable.

Why didn't you do it? Start every dollar for free by downloading it in the app store or Google. play. Alyssa is in Montana. Hi, Alyssa. How are you? Hi. Thanks for taking my call. It's an honor to talk with you guys. You too. Yeah. So my husband and I are Big Day Ramsey followers. I'm not sure what step we are in, maybe you're at least five. And we're trying to make the decision if I can be a stay-at-home mom. Cool. I love it. It's a, yeah, it's really an emotional. decision and we're both analytical. So let's do some, let's do some analytics on the emotions.

What do you make? So I'm working right now. We have one kiddo that goes to day's care. I make 85 a year. What does your husband make a year? 116. 160? 116.

116. Okay. Yes. All right. And so what is your take-home pay? Um, yours on the 85? 46. Okay, 100 a month.

Is that right? Like 4,600 a month. Yes, yeah. Okay, you got a lot coming out of that. Yeah. So what's coming out of that? Retirement and just other taxes. I don't have a lot coming out of mine.

Yeah, you do. 4,600 is only 48,000. You said you make $485. Yeah. There's a bunch coming out. Something's coming out of that check. What's coming out of it? I don't know.

Maybe federal taxes. No, it's not federal taxes. It's not just too much for that. How much are you putting in your retirement? Just up to the match, which is like 5%. Okay, 5%. Are you putting, are you paying that family's health care out of yours? No, it's out of his.

Are you getting a tax refund, Alyssa? No. No, we're not getting a refund for 25. Okay. Well, there's, I'm trying to help with this, but so, okay, let's use the 4,600, even though it's wrong. And something's wrong with it. But anyway, your daycare is how much? $800.

Okay. All right. So after daycare, which you would not have if you were at home, right? Yeah. Okay. So 46 minus 800 puts me at 3,800. Is that sound right? Yeah. Okay. If you take $3,800 and put it in the bank out of your budget for the next three months, that would mean you were living on your husband's income.

Mm-hmm. We're about there. We typically have about $4,000 in excess each month. Okay. Oh, good. Then you can do it. You won't have any access, though. Right. And that's kind of the scary part. Um, he, we just bought a house and it's our first home and it's like $3,000 a month in all expenses for the house. And so it just feels like that's... Did you guys do the math on both incomes when you bought the home? I mean, obviously. No, we tried to make it on just one.

Oh, you did? Okay. Yeah. Because he brings home how much? Seven. Eight. Yeah, and you're at 40%. Yeah.

Your house is an awful. your house is a big chunk of his income. Really big. Right. Yeah, it is. And so that's going to be a, you're going to be tight on the house. So what is the prognosis on him getting raises? I think really good.

He just started there, and he kind of had to take a step down when he started there. But I think as soon as he gets like a year under his belt there, he can move up. So I don't think we're like in this situation for a long time. feels like we're going to go back to beans and rice. How much do you? You probably are. You probably are for a year until his income comes up. You don't have any, do you have an emergency fund in place?

Yeah, you said your own baby step five. I'm going to do it. If I'm you, I'm coming home. That's your desire I'm taking it or you wouldn't ask the question, right? Well, we have our second is coming in the summer. Oh, yeah. I just, I really would like to stay home after that. Would you work till the summer, work for the next few months?

Okay. Well, I would do that, listen. I would just stack some extra cash in another fund just to have on the side, just to give you some peace of mind. Because it's going to be tight. Yeah. The first year of you being at home is going to be tight. But you're analytical enough. You know your numbers. We can tell because we do budgets for a living. When we're asking people their numbers, they don't know their numbers.

That tells me they're going to be in trouble. But you know every number. You've got it all dialed in. The only number you didn't know is why your take-home pay is so low. But other than that, you know every number I've asked you for. And it sounds like the two of you're talking about this together. He knows the numbers. And so if you guys do a written detail budget that makes you live on his income minus daycare and you stack all that cash, you have proven that we can live on his income because we won't have the daycare.

Yeah. And you're going to have other savings being at home, car gas, dry cleaning on the clothing that you don't wear to work anymore. you're now cooking from scratch, which is less expensive than a convenience-based food because you're working and tired, and you're not going to eat out as much because you're not working and tired. And so there's going to be a lot of other potential places you save in the budget when you're at home. Two babies. You'll be tired. But yeah. Crocpot will be your friend. Yes. But being at home, being at home is what you're after. And, you know, this is the cost of being at home. We're going to be a home economist. Make the economy of the home.

home be more functional than it is today. And yeah, and and here's the thing, Alyssa, you guys made such great decisions up into this point, doing the baby steps that you're a, you know what I mean, that you even have the choice, which is just wonderful. And so when John Deloney always talks about solving for peace, like as a mom, as I hear you and your desire to do that, you're going to have, you're going to have peace. It's where you want to be. You want to be home with those babies. And so there's something that you can't put a price on that, right? And for a season, it's going to be tight. It's not going to, you know, you're going to have flexibility financially in a major way. Sometimes when people hear you say don't put a price on it, it means you can do whatever you want to do.

No, you can't do whatever you want to do, but you guys can afford to do this. No, well, no, I would say the other way, if you can't do it and you still choose to, then you are going to be stressed and there is not going to be peace. So no, there is a real piece that you have created to be able to step into. But you're going to have to be grownups with the money. You can't just say, oh, I just choose to be at home and we're going to be irresponsible. Well, no, that girl. You're not that girl. Anna does not create peace.

Yeah. And she's not, she's not that person. No. She's at their very detailed. Congratulations. Yeah, I would quit after the new baby comes. I agree with you. I'm in.

And because it's your goal. And you've earned the right to do your goal, to Rachel's point. Yes. Yes, yes, yes, yes, yes. Very well done. That's cool. You know, I remember the first time distinctly that I took a call and the lady, we figured out that with daycare and she wasn't making a lot of money, Alyssa was making a lot of money.

But with daycare and whatever else, it came down to, they had a $400 payment on their van. And that was actually what she was netting. So she was working to pay for the van. And it was like this light bulb comes on while we're talking to her, sell the van and quit your job. Don't work for a van when you want to be there with your kids. Yeah. And we've made that trade subconsciously, accidentally, Americans have for decades now.

Mm-hmm. Well, in daycare with two kids, right, it's going to be, you can just double it. Oh, it's stinking, expensive. So, like, it does start to dwindle to your point of the margin that's actually happening. It's crazy. Yeah. And so it's, it makes it more and more and more reasonable to be at home, the more expensive if that stuff gets.

And then go, what is it we're net, net, net working for? Well, get rid of that debt, you can do it. And that's what they have done before today. They got rid of the debt before she made the call because they're at Baby Step 5. When people hear my story of paying off debt, they say things like, dang, that must have been so hard. I can never do that.

And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it, never having the long-term gain, just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom, but you need the right tools to do it, like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money

situation. And every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the every dollar app and start for free today. In the lobby of Ramsey Solutions on the debt-free stage. Steve and Kathy are with us. Hey, guys, how are you? Hi. We are better than we deserve. I love it. Where do y'all live? We are in Boise, Idaho. Oh, I love it. That's a great town. Well, welcome to Nashville all the way across the continent to do a debt-free scream. All right. And how much of you guys paid off? We paid $580,000. Yes. How long did that take? Twelve years. Good for you. And your range of income during that time?

We started at about $100,000. And last year we made $450,000. Whoa! What do y'all do for a living? I'm an engineering manager. Good for you. Yeah. Awesome. And I do music at my church. Oh, very good. Very good. Amazing. What was the $580,000? What kind of debt? It was our mortgage. Yay! Look at weird people. Paid off the house.

Yeah. So what's this house in Voicester? It's worth about $1.2 million. All right. So we're millionaires on the house alone. Look at it. Look at you. What a great house.

Amazing. Oh, you guys. Congratulations. Way to go, man. That's got to feel amazing. It feels amazing. It's been a long road, diligence, and a lot of patience. But, yeah, we made it.

It sounds like the majority of those years, income was at the lower end of that range. Yeah. And then it just swooped up lately. It actually slowly went up. Oh, slowly. Yeah. It was steadily.

Did you all have consumer debt 12 years ago that you paid off first? No, well, really just working at the house? No, we started. First, we started in 2010, we actually took FPU for the first time. So what happened was in 2007, we bought a new house. We had kids. And then we took FPU in 2010. We paid off all of our consumer debt in 2010 really quickly.

You know, and you don't. what happened in 2008. We were way underwater. Oh, yeah. Yeah, in our house. Terribly. 2013, we refinanced. And then my dad passed away in 2018. And then my grandparents passed away in 29 over the course of the next year.

So my mom moved up to the Boise area with us, and that's when we built that new house in 2020. And that's my, you know, we have a mother-in-law quarters where my mom lives with us. So we steadily, you know, we had made decent money throughout the years. You just work on the plan. We worked

the plan. We were very diligent. You know, We went through the baby steps, four, five, and six. We put three kids. We have three adult children, put them through school. One of them was in the Air Force. Wow. So six grandchildren. Oh, look at your family.

You guys don't look old enough to have six grandkids. Oh, my gosh. Wow. That's our why right there. That group. Change the family tree. Exactly. Yeah.

Oh, I love it. And these two sitting over here are the ones that started all this for us. Our mentors came with us. They met us out here. They joined us because they put us through FPU. Jim and Debbie, our friends Jim and Debbie, they did the first FPU at our church. They've been kind of inspirational for us. I want to be Jim when I grow up.

Yeah. Amen. It's amazing. Well, I'm glad they got to come with you. That's so neat. A lot of fun. And they get to celebrate your success, too. And so how much have you guys got in your nest egg these days?

About $1.6, $1.7 million. All right. So you're bumping three million now. Wait a God. I'm so proud of y'all. Well done you guys. That sounds weird to say it out loud, doesn't it? It doesn't feel like it.

It doesn't. It was actually kind of strange. I was laughing. When we first, when we went to the bank to pay off the house, it was a little bit surreal. I was expecting, you know, streamers and balloons. The bank was not that happy. You know, if people would say that a lot.

Is that funny? I walked out of like, that was kind of a downer. It's kind of climactic. Yes. It was a lot of fun. If we ever get a bank that celebrates when you pay off your house, we have a new bank. Right.

Exactly. That's so cool, y'all. Way to go. Yeah. How does it feel to be completely free after all these years? Yeah, it's amazing. It does feel amazing. You know, we know we can be more generous.

We really want to be able to exercise that generosity muscle, you know, and help as many people as we can. That's kind of been a big part of our lives throughout the years, so we can continue to do more. And also helping our grandkids go to school. Amen. Oh, yeah. Absolutely. Yeah, what have your grown kids said, as you guys have been doing this journey?

Have they? They're proud of us. I mean, all three of our adult children, they're debt-free. Yeah, we made them take the classes. They took FPU as they were growing up through high school. And he's coordinating it. Yeah, I've been coordinating the FPU since 2013. Wow.

Thank you. Oh, my God. It's a pleasure. We actually just start our, I do it every spring, and we just started this last week. Oh, wow. Okay. So the class will get to see your debt-free screen. I guess so.

That's good. Yeah, it's kind of surreal. Hey, my FPU coordinator, you paid on the house. I don't know about you, but I'm just saying. So way back in the day, when you first went in the class, do you remember those emotions of like, I wonder if this whole thing. a con. I wonder if somebody didn't want to go. We both wanted to go. Well, maybe she did. I'm a free spirit. Oh, yeah. Oh, we are the

prototypical nerd free spirit couple. I'm really nerdy. I got you, girl. I got you. I am super nerdy. You know, the whole spreadsheet thing. So I was into it. I like the plan. I like the process. Yeah. You know, it tells me what to do. You know, so. We had to take it a couple times from them. I was not willing to cut up my Costco. That was the only one I was not willing to cut up. The Costco credit card. Yes. That was going to save you. Yeah.

I felt like it. I did. But once we tracked it a whole year, I realized I was spending about 30% more just swiping. Oh, wow. And so I thought, okay, it's on paper. I can see it. So that was it. It's not a theory.

I'm really doing this. Yeah. Wow. That's an interesting thing. And save 30% at Costco. George Camel would be proud of you. Our Kirkland King. He loves it.

It's awesome. All right. So now you're coordinating classes for Over a decade, almost 15 years, you accumulated a nice net worth, a good income, you're debt free, your kids are debt free, your family trees changed. This is a massive transformation. I mean, because when you started, I assume you didn't have anything. Oh, nothing. We were living paycheck to paycheck for the longest time.

The budget was huge. We weren't paying attention, really. I mean, it was just kind of, oh, money comes in, it goes out. You were normal. You were normal. And I'm so proud of you. Yeah. What a great transformation.

Thank you. God has done a work. Oh, absolutely. What do you tell people the key is, that couple that comes in that first night, and they're kind of looking side-eyed at you, and they're like, what is this, some kind of cult or what is this deal? It's this Ramsey guy. And what do you tell people the key to getting out of debt is? Because you guys are, I mean, you're like poster child. Yeah, for me, it's really simple.

First is the budget. Getting it on paper, seeing it, you know, you're telling your money what to do each month. Like you say it, I've heard you guys say it a million times. You do the budget, and you feel like you get a raise immediately. So we immediately had more money because we were paying attention to where it was going. And then just intentionality and discipline. Always being on the same page. Yes.

Always. We talk about our money a lot, you know. Every two weeks, I'm a nerd. We send a picture. I have this massive spreadsheet that I do, a budget spreadsheet. I'm an engineer. So every two weeks, when we get paid, I go and I do our budget, you know, for the next. I have it laid out for the next six weeks, exactly what's going to happen.

Even with the house paid office. I know Saturday morning. He's going to be up there doing it. I actually enjoy it. He does. He does. He does. I love it.

Yeah. Yep. He likes to save. I like to spend. So, Kathy, along this way, he's obviously a nerd, a detailed guy. Along this way, how did you manage to keep your voice speaking into that budget? I'm the one he just, I like to have fun. So he makes the money.

I make sure that we enjoy it, right? Like, that was my thing. I always wanted to take the kids camping or I just wanted to do one trip. So you want to look at the budget and see that line in the budget? Yes. Yes. And he respected that. Yes.

Absolutely. We would go through the numbers and I would, you know, if we would go line by line, I had line items for cash and things that would auto pay and out for the how much cash we're going to pull out every two weeks. And she's yawning until she gets to the camping line. Here's the camping and the Costco line. Yes. Yes. How much have I got for camping?

How much have I got for Costco? But I know for me, the biggest thing is keeping God at the center. Uh-huh. And this is why we have what we have because of his blessings. Amen. And so we got to do right by it. Amen. It's a responsibility.

It's great. You're being a blessing by being here today and sharing your story. It's inspiring. We appreciate you. You're very, very proud of you. Thank you for teaching the class. Thank you for your mentors for getting you guys in this. They've completely, I mean, all those grandkids, all those people are changed.

Sweet. Because God's ways of doing things. got inserted into your life. We really appreciate you guys and all your personal. I mean, I feel like we know, I mean, you don't know us from Adam. I see you guys around. I feel like I know everybody. I see John Deloney and I feel like we're brothers and, you know, you guys and know who I am.

You are. You are. And we are going to see you on the cruise next year. Oh, yeah. All four of us. All four of us. We're all going. We're all high five.

Stephen Kathy, Boise, Idaho. 580,000 paid off for the last 12 years. That's the last step. Their house and everything. Baby Steps Millionaires. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Awesome couple. It's amazing. Very neat. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next.

Now, you can get that same kind of help any time with Ask Ramsey. Ask your money question and get answers. built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to Ramsey Solutions.com and try Ask Ramsey today. That's ramsysolutions.com. Our scripture today, 2nd Timothy, 26. It is the hardworking farmer who ought to have the first share of the crops. Sanreda O'Connor says, do the best you can in every task, no matter how unimportant it may seem at the time, no one learns more about a problem than the person at the bottom.

Ooh. This is true. Stephanie is in Tampa, Florida. Hi, Stephanie. How are you? Hey, I'm good. How are you? Better than I deserve.

What's up? Thank you for taking my call. My husband and I recently had a baby. The last few years, I've worked as a travel nurse. And because we just had the baby, I took a position as a staff. making three times less than I was making before. So we're just trying to figure out how to pay off $150,000 without me going back to traveling. What are you making his staff?

I make about $80K a year. What does he make? He makes $82. $82. So we have $162. You were making bank as a travel nurse, but that's not a good idea with a brand new baby. I agree. Right.

So we decided to come back home, but it's taken a huge hit on us financially because I'm so, I don't want to say I'm used to the money, but you know. But you're used to the money. Yeah. Yeah. That's okay. That's a normal thing. I mean. 240 versus 80s different.

That's okay to say. Yeah. Yeah. Yeah. For sure. Big difference. Yep. So were you making huge progress when you had the 240?

We did make some progress, but not as much as we wanted to. What did you do? What were you doing? Where were you screwing off? Well, I mean, we purchased a house that was a, I don't want to say it was a complete mixture upper, but we put about a hundred and... You bought a house while you were trying to get out of debt. Well, that doesn't work.

Yeah. At least we have a house now, though, and we wanted to have the house before we had the baby. So that's kind of what happened. Okay. Well, the reason you haven't gotten out of debt is you put paying off the debt further down your list of priorities. Yeah. That's going to have to change.

And so your priorities don't include eating out anymore. Your priorities don't include going on vacation anymore. Your priorities don't include spending $80,000 fixing up the nursery for a newborn who doesn't even know that stuff's there. Right. Gotcha. The thing is, is my husband and I are actually pretty shrugle. No, you're not. I would say we are.

No, you were making $240,000 a year and you didn't pay all. hardly any debt. You're not frugal. Yeah. Well, we're trying to be. No, in your mind you are, but the reality is you spent the money. That's the opposite of frugal. So you're going to have to get frugal, though, if you want to make progress. Could you all live on one income for two years? Like $80,000?

Yeah. I mean, that's what we're trying to figure out. We have, we consolidated our loan into $1,000 payment, and then our mortgage is, is about 2,400. So that is our debt, period. We have it all together and focused into two bills. So one is our mortgage, and two is our personal debt. Okay.

Well, if you can, you know, buy food, lights and water, and throw money at this debt, 75 a year gets you out of debt in two years, right? Hmm? I said how. Well, you make 160. Yeah, but how do we, how do we do that? How do we live on one income when we pay like $2,000 for one debt and then $2,400 for another?

Well, I thought you said it was $1,000, but the $2,000 going towards the debt is part of the $75. Okay. Yeah, so I mean... We need to get more focused. Yeah, are you guys on a budget, Stephanie? All right, 162. 162 minus 75. Okay, I got you, Dave. Here, you cough. Turn off your mic and cough.

Stephanie, are you guys doing a budget, a written budget? We are, and I have it in front of me. You do. Okay. So where are things that, well, what is left? After you pay your mortgage, like all the necessities that you have to have, what is left? How much is left? I'm looking at the monthly total, not very much. We're putting 1,900 into child care alone. Into child care. 19. Wait a minute.

I thought you're, oh, yeah. For one baby? For one baby. We pay $20 an hour. Is it daycare? No, it's a babysitter. We couldn't find any openings for daycare around us. That's what we wanted to do, but we're paying for a babysitter, so it's $20 an hour.

Okay. So, I mean, the reality is, Stephanie, that you guys, it may take you three years. I don't know, the plan, but to have a level of intensity that you guys have never had before is what this is going to require to get out of this. And is the 150, was that student loans? What was it? So 150 total. So we have about 60 in student loans and then 100,000 in personal loans. And personal loans. Is that car debt, too?

No, we paid off all our cars. What did you use the personal loan for? So it was a combination of a roof plumbing on our house. Oh, for the house. Yeah, so it was a combination of our roof plumbing on our house, and then we had some credit card debt. Okay. What do you owe on your home? Currently, we owe $281,000.

What is it worth? I would say about 500,000. Yeah, okay. Well, some of what you're paying off is not consumer debt. It was part of purchasing the home. So, you know, if you rolled some of that into a refinance, that wouldn't be the end of the world, but I wouldn't do that. I think you guys make enough to plow through this,

but you're going to have to just look at this budget and go scorched earth. Beans and rice, rice and beans, nothing. Spending, nothing. Yeah. So that's what's, I mean, yeah, it is. It's just, it's, it's the mindset of having to, the deeper you sacrifice, the faster you're going to get out. And that may mean him working extra at night too, Stephanie, working weekends, bringing in even more income over time. But again, the deeper and faster you sacrifice, the faster you're going to get out.

And the less you sacrifice, the less you kind of make everything a little bit more comfortable, the longer it's going to be of that process. So it really, it comes down to families. I mean, honestly, look at each other and just choosing. Okay. Have you stopped all your contribution to retirement? Still paying into that. We're paying about $7,000 each year to both of us. Oh, you are?

Okay. So if you stop that, that's $7,000 freed up. So pause retirement. 14. Yeah, pause retirement. Temporarily. Yeah, we have a lot of money in our retirement, but we want to make sure that we're set for us. You're going to be fine, Stephanie.

Yeah, but this $150's hanging over your head. Stephanie, if every time we bring up something on how you can get out of debt, You tell me why you can't do it. I can't help you. Oh, no, I don't mean to be like that. I'm just thinking of... Well, you are. So, I mean, you got to stop doing that.

Okay, you need to stop retirement. You need to go through this budget with a scorched earth idea and burn the place down. You make a tenth of, I mean, you make a third of what you used to make, and you weren't even making it on that. And you were calling yourself frugal. So you've got to sit down and start looking at this and going, okay, we have to sit down. have got to treat this like our hair is on fire. We've got to treat this like the future of our family is dependent on getting rid of this stupid debt. Regardless of how we got into it, this is how we get out. We stop all retirement. We stop eating out. We stop going on vacations. We stop anything

that looks like a luxury and we plow into this debt like our life depended on it. And in two years, you could be done. Maybe three, but two, you should be done. You can pick up shifts at the ER. He can pick up shifts here and there. The good news about nursing is you can always up your income temporarily without destroying the family, without going back on the road. I agree with your decision to come off the road with the baby. I agree with that. But then we went and hired a nanny, basically.

And, you know, when you have $150,000 in debt and you make $162,000, you don't live in Nannyland. Yeah. That's not Nanny land. Nanny land is more income than you make. and less death than you've got. So that's where you are. And for a period of time, for a period of time. Just for a short period of time.

What have we got to do to go crazy to clean up this mess we've made? And no excuses, no rationalizations. You've got to end it. That puts us our The Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.