The Ramsey Show - Clarity With Money Brings Peace At Every Stage Of Life

Starting point is 00:00:04 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 Show Network in the Fair Ones Credit Union Studio, this is the Ramsey Show. All right, George, let's go straight to the call lines. We got Mark, who's in Eugene Oregon. Hey, what's up, Mark? Hey, thanks for taking my call.

Starting point is 00:00:32 How are you all doing? We're doing excellent. How can we help today? Yes. I don't have a lot of experience being married so far only about three years and dealing with the finances of that. But my question is, is it normal, say, if one person makes more than the other,

Starting point is 00:00:48 that say a big expense comes up, that the other person should go into debt to pay the other spouse back? Zero parts of that makes sense. No parts of that sentence. Who told you that? Exactly. That's what I kind of felt.

Starting point is 00:01:03 I mean, regardless of how the conversation is going to go, I'm like, I'd feel relief either way. way. We're square now, but for a couple years there, it's been pretty stressful on my part to pay her back. Okay, give me a real-life example, something that's happened. Yeah, so she's had a much more stable job than me. I mean, she's about 11 years older than me, so much more, setting her job makes better money. How old? How old is she, and how old are you?

Starting point is 00:01:33 She currently in her 40s, and I'm in my 30s. Okay. And when we met, I was in my 20 that she was in her 30s. Okay. Yeah. And so I was in the mindset of like, well, I'm still building my career. I've made big career changes. So a lot of the jobs that I had throughout her relationship, and at the beginning of the marriage, I was only making 40, 50K while she's making 130K plus. Okay. So big household expenses come up, you know, solar, HVAC unit, big expenses.

Starting point is 00:02:05 and, you know, she can pay that right out of her savings. Like she had like $100 grand savings and paid it in cash. But then it was like, okay, now you owe me half. I was like, okay. So you don't have combined money. I mean, you guys are, your fancy roommates who cuddle on the weekends. Yeah, and I've actually used that same term with her. Like, I feel like I'm a renter at times.

Starting point is 00:02:31 Well, you guys are making no shared decisions. you have no shared financial goals, no shared accounts, nothing about this screams we are married. Now, have you asked her about that? Because here's what I'm hearing. If you've been going along with this for all these years and haven't really said the words, you know what, I feel like we should be combined. Then she's kind of just doing what she thought is normal, which is I do my thing, you do your thing. We kind of split it 50-50.

Starting point is 00:03:01 you're not holding up your end of the bargain. So it just sounds like a conversation needs to be had about you wanting to be closer to her and have more transparency and have less of yours versus mine in more of an hour's take on the money. Have you ever done that? Yeah, as of recent within the past couple months, because now that we're square and I'm actually making just as much money as her because my job, I finally landed, pays really well, and then I started my own business that also did equally as well. So I'm like, okay.

Starting point is 00:03:34 But my fear is, is like, if I lose that job again or business doesn't do as well, I'm not making as much that. Yeah, you making more doesn't solve the root problem here. For example, my wife stays at home. It would be insane for me. Like, well, hey, babe, since you make nothing, you owe me half. That would be, I'd be sleeping on the couch if I'm lucky. And so regardless of the situation, who makes more when it's y'all's money, now we go, okay, we make $180,000 a year. What are we going to do with this money? What are our goals? Hey, we need to do

Starting point is 00:04:06 this home repair. We want to go on this vacation. We need to pay off our debt. And so far it's been, well, Mark, it's every man for himself. Good luck out there. And there's also, it sounds like there's some gender roles playing out where I don't know if it's both of you or her, where there's this feeling of since you're the man, you have to be making as much as her or more. I don't know if that's coming from both of you or just coming from you or just coming from her. But these are all things that need to be discussed out in the open very, very candidly so that at least you know where each other is coming from and then you're able to bring up, hey, I know that that's the way you feel, but that's actually not my viewpoint on it.

Starting point is 00:04:49 And let's seek to learn about each other first instead of changing each other first. That's what I would do. That'd be my first order of business. Let's learn so that we understand where each other is coming from. Then we can start to kind of make changes as opposed to today I want to combine our finances. That's probably not going to happen. Yeah. And I guess another one with that is say the mortgage and daycare for the kids.

Starting point is 00:05:14 Because those times where I wouldn't make it as much, it was still expected that I'd pay the exact half. But I was like, well, that's going to not allow me to say put as much into say 401K or savings. Yeah. Yeah, the whole system is broken. How have you guys been doing this? Yeah, we're going to pull up the whole thing. So you can almost like forget about that because we're starting over. Has she been married before?

Starting point is 00:05:35 No. Okay, I'm wondering this is coming from somewhere where she's being very protective of what she's built and therefore doesn't want you involved. Yeah, and I brought that up where, you know, a very strong sense of independence and all that with her. I'm like, okay, I get it. Love that. if it starts to get to a point where it's like, I don't need you. Like, I've got this on my own, but kind of hold it against you is where I'm like, okay, that's kind of disrespectful.

Starting point is 00:06:05 Well, you become one when you get married. And it's not to say that you forsake everything that you are. You just stand next to somebody else and you both be fully who you are together. And the foundation of all this is trust and respect. And it sounds like you don't have either of those things from her. Yeah, and that's what I've expressed to her over the years. And yeah, I've stayed consistent with that, but at the same time, I'm like... Sounds like you need a mediator, a counselor involved, who can help you guys both hear each other

Starting point is 00:06:40 and take what you're hearing from each other and actually convert it into some actions that are going to get you on the same page. Oh, yeah, we've done that. I understand where her insecurities come from. as far as, say, improvements on that over time, it's one of those things where it's like, I don't know if you're getting there to know that I'm on your team, I'm not a leech. What was the homework? Well, mostly just not getting into a cycle, like falling into our cycle with each other of, say, the attachment styles, anxious or avoidant attachment styles and understanding where people

Starting point is 00:07:17 are coming from, not jumping the gun and getting into your, you know, four horsemen. Godman. But, yeah. And you're just saying you're just not seeing it. Well, it's as long as there isn't any, I mean, we've never been in destitute. We've never really been in major debt. Nothing like that. So a lot of it to me is like, we're doing fine.

Starting point is 00:07:41 But I don't know why your savings should continue to balloon while mine either stagnates or depletes. Because I'm like, what happens later in life, retirement, are you going to retire without me? Oh, for sure. the plan. Right. Leave you in the dust, Mark. I mean, part of it is you can choose not to, there's some of this you can choose maybe not to participate in, which is when she starts using the I versus me and versus you language.

Starting point is 00:08:08 You can say, well, I don't want to participate that. I see myself together with you and not participate in that and just say, here's what I'd like us to do. Here's what I'm thinking would be great for us, our money. and you can really start leading the charge in that as much as you can. And when she starts to make those comparisons, just say, well, I did not plan to pay you back because I feel like it's our money and I don't like this feeling of power struggle that is creating and really just hold your ground for a while. That's what I do.

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Starting point is 00:10:27 You bet. How can we help today? Well, I think I have a good situation, but I need some guidance as to how to do this. I retired last February. I had to because of my profession. And I followed Dave's plan now for close to 20 years. So I've done fairly well. Basically, my nest egg is just about $3.3 million. And I've been a saver all my life. So I'm trying to figure out how much I can spend and when I can spend it. All right. Well, how old are you?

Starting point is 00:11:04 I'm 65. 65. And what are you doing right now? I mean, how are you drawing income right now? I'm basically drawing the income out of my 401k that I've had forever. and I've thought about going back to work on a limited basis. I have a few small health issues that I'm working through that are kind of keeping me from working at this point anyway

Starting point is 00:11:30 just because of having obligations to take care of things like that. But it's just, you know, I'm afraid to spend money because I've always saved it. Oh, I see. Okay. What are your current expenses if you added them all over the month? Yeah, I sure have. It's basically, you know, everything comes out about $8,000 a month. And is that what your, what's your draw set on? My draw is set on eight is just about $8,000.

Starting point is 00:12:00 Okay. So you're not, you're not doing anything extra. No, no, I'm doing absolutely, other than, you know, things like buying Christmas presents and, you know, birthdays and possibly going out every once in a while to get something to eat. But no, I'm, I've been a workaholic all my life. Well, what do you want to do? If I said, Scott, just shoot me straight. Do you want to go to Europe? Do you want to go to buy a boat?

Starting point is 00:12:26 Like, what is it that you want to do? Well, actually, believe it or not, I already have a boat. And I don't really want to travel. I don't know what I want to do because my whole life was pretty much working and just, you know, existing. Wow. Do you have any other sources of income outside of the 401K? pension, social security, IRAs, anything like that? Real estate?

Starting point is 00:12:51 Well, Social Security is in the mix, but I'm not drawing on it yet because I don't need to. Yeah. And, you know, and I'm not at my full retirement age. Okay. Yeah, you could wait until 67 or even 70 if you want to really get the max. Right, exactly. Yeah. The math says you're fine.

Starting point is 00:13:08 You could easily withdraw 10 grand a month from that account and it's never going to deplete in your working life. I mean, in your lifetime. Let's say you lived even 95. the balance will still be there. And so I'm not worried about that unless you have some crazy, you know, your expenses are going to go up to 20, 30 grand a month at some point in life, which it doesn't sound like that's the case. So you just need to factor in, you know, healthcare costs. It's kind of a smile. What they've seen in the financial planning world is once you retire, there tends to be a slight upgrade in spending for a little bit because you're like, woohoo.

Starting point is 00:13:40 And then as you get older, it actually goes down for a foreseeable amount of time. and then in the final stage of your life, it ramps back up due to all the health care costs. So for me, this is way less a money question and way more a self-discovery question, and I think it's really fun for you to be able to do this at this stage in your life. If I were you, I would be so intentional about just getting to know

Starting point is 00:14:06 what do you like, what do you not like. And I would just play a game, honestly. I would play a game where every month I force myself, to budget for something new, just to see. Your expenses are eight? Can you make it 10 grand, and the extra two is just fun money for Scott? Would you be able to do that right now? Well, I'm actually doing that right now, and the problem is, is I'm saving my own money again.

Starting point is 00:14:34 Well, that's what I'm saying. You're not actually spending it. That's why I say, make yourself, you know, go get in your friend group and say, what are you guys doing? And if they say, it's almost like make yourself say yes. If they say, oh, this weekend, we're going on a hike. You go, all right, I'll try it. And then you come back and you go, I'm crossing that one off the list. I don't want to do any more of that.

Starting point is 00:14:54 And then if the next time they go, we're going to Burning Man, you're like, all right, I'll try it. And then you end up, man, I really like festivals. Like whatever, I just want you to try a bunch of things. And just let this be your season of I'm just getting to know Scott. I'm in a new season of life. I am unattached from work the way I you know it's a very different stage for me and it's just exploratory and I think that's really really fun there's no wrong or right answer I think I'm just being too cheap and I'm having trouble exactly now do you have anyone close to you in your

Starting point is 00:15:32 life I have two daughters yes great would they encourage you to spend uh I I don't know whether or not they would because they've seen, I mean, they're kind of Dave Ramsey's also. They just know Dave, dad's a cheapskate and now he's trained us to be cheap skates. Can I tell you, though? Well, they don't call me a cheap skate. Well, here's the other side of the equation. You have lived like no one else and now you're forgetting that it's time to live like no one else. It's time to do the things that felt wasteful.

Starting point is 00:16:03 Yeah, things that felt crazy and wasteful are now going to be a rhythm of your life. You get to delegate the things you don't want to do. You get to upgrade the things that really it's time for an upgrade. You get to take the trip that felt frivolous. You get to fly first class, even though you've always felt like that was a rip-off. You get to do all those things. You've earned the right. And so what I don't want you to do is hoard it all.

Starting point is 00:16:24 And then you end up, you die at 95 years old with $50 million. And you're like, wow, man, I really should have enjoyed life a little more. But even that, Scott, just because I think awareness of this is a really big point of it, you really have to remind yourself that you're kind of rewiring your brain in this moment. Because for years, you've literally created a pathway in your brain that said spending money, you've equated spending money with irresponsible behavior. And a responsible person saves their money. A responsible person puts their money away.

Starting point is 00:16:57 You've told yourself that for 40 years. And now it's like, okay, I need to rewire my brain and do the work of actually doing those actions to tell myself, if I spend this money, nothing bad's going to happen. And it's literally at that point, you're just following science to help you learn that if I spend money, if I spend this money, nothing bad's going to happen. Nothing's going to implode. Nothing's going to fall off. I'm not going to destroy anything. And the more and more that you do that, the more you will free yourself up to realize, oh, this is good.

Starting point is 00:17:31 And you won't have that part in your brain that's like, mm-mm, don't do it, don't do it, don't do it. Right? So that, I mean, that's just at the lowest scientific level what you're doing. If you think about like a workout, you have been doing leg day your whole life and now your arms are atrophied. And so it's a different kind of workout. You're working different muscles. And it's going to take time. This is not a thing where next month you've just paused all investing and you're only spending. I think this is going to take a few months for you to get in the rhythm of. And it's going to go, hey, I'm okay. The balance is growing. Not saving is not hurting me. and spending more than I used to is not hurting me.

Starting point is 00:18:09 And so you're in a great spot. This is not advice for everyone. This is advice for a guy who has $3.3 million sitting there at $65. If you had half a million dollars, it would be a very different story. I'd be going, dude, you need to get back to work and you need to keep saving. But you have done the hard work. And so it's time to enjoy it. And a good book for this, The Book of Ecclesiastes.

Starting point is 00:18:31 It's one of my favorites to remind myself that everything is meaningless, so just enjoy the time you have on earth. Drink and be merry, my friend. That's funny. I think, you remember when we did the Live Like No One Else Cruise last year? I talked about this exact subject of remembering that if you're, you know, walking the baby steps, you are, you're wiring your brain for a while to say, the habits that I was doing, which were usually spending, got me in a bad place. Like, you've told yourself that a lot. So what I must do is not spend to get myself in the good place. And we tell ourselves that for however long it takes us to get out of the baby steps. And then we have to then do the work about rewiring our brain and say, you know what,

Starting point is 00:19:15 I've become a financially responsible adult. I can now spend my money again. And by the way, being a financially responsible adult, if you're checking the things on the checklist, you're living on a budget, you're living a life that's out of debt, you carry the proper insurances, you value savings in the way of, you know, having your three to six months, you're paying off your house, you're investing for your future. in a 401k and you prioritize generosity, if you're checking those green boxes, that means there's some money that you can spend and enjoy it.

Starting point is 00:19:45 You ran the marathon. You went past the finish line and you're still running. It's okay to take a pause, have a drink, and enjoy this third phase of your life, Scott. Hey guys, George here. Listen, just because it's 2026 now doesn't mean 2025's ideas all go away. Some things are timeless. Like if you want to win with money, it's still the same playbook. budget like your money depends on it, avoid debt like $10 lottes, and build wealth on purpose.

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Starting point is 00:21:58 Mandy's in South Dakota. Hey, Mandy, how can we help today? Hi, thank you guys for taking my call, but I just have a, I feel like this, maybe I'm making something out of nothing, but my husband is like super private about his finances. And it wasn't a big deal when we weren't married. But I guess I thought we were on the same page when we got married. Which was when? How long ago? Well, we've been together for about 20 years. We've been married like seven. Oh, okay. Yeah. So 13 years together, seven years married. Yes. We've been together a long time. And it really didn't bother me until we got married. And I guess I thought we'd be working together. And I've tried to like encourage

Starting point is 00:22:58 working together. He was, when he turned 60, so we're an age gap couple. So when he turned 60 years old, he was downsized from his company. So he's been unemployed slash retired since then. So that's been about six years. Okay. So he's about 66 now? Yes.

Starting point is 00:23:23 How old are you? I am 53. Okay. How has money been handled thus far? In the past seven years, what does it look like for you guys to run your household? So that's the thing. Like, he's been entirely like, I'm going to handle my own. We have a joint checking account for our like household bills.

Starting point is 00:23:43 He just refused to combine anything. Any children? None together. We've both been previously married. We have kids, you know, from those relationships. but they're grown and out of the house. So they don't really factor in. But, like, I, like, obviously he's retired, so I'm thinking, like, down the road, like, you know, what happens to one of us.

Starting point is 00:24:11 But, you know, I want to think about our future together. What have you said to him? Because here's, let me tell you what I'm hearing from you, and then you tell me, so what I'm wondering is you were together for 13 years, it was a way, which was very separate, which makes sense. You weren't married. Then those habits kind of filtered into the marriage. When did you say, and how did you say, I'd like for us to, now that we're married, be one, and then what did he say? So tell me about all that part. Well, that kind of, that was kind of a conversation before we got married. Like, and I thought we were on the same page before we got married. And after we got

Starting point is 00:24:53 married, like, things just weren't clicking that way. Why did you think you were on the same page? What made you think that? Because we had those conversations. And he said, yes, I agree. Yep. Yep. It was like, yep, I think that's a good idea. I agree with that. You know, like, but then it was, like, to actually put them in practical motion, like, he was just like, what does that? What does that? And then did you dig into that? I tried. Like he, he absolutely, like, he won't have a conversation. He avoids having those hard conversations.

Starting point is 00:25:29 I tried going, like, I wanted to go to, like, let's go to therapy. He wouldn't go, you know, so we can talk about these things. He won't go. He won't go. He won't go to therapy. Um, no, he just won't, like, he can't hear me or he can't, like, he's, like, he's, He doesn't, his voice doesn't come out. Like it's just, it's a total withdrawal.

Starting point is 00:25:50 Just shuts down completely. Yeah, there's a lot behind this that he's not telling you. And maybe it's from the past. Maybe it's his own insecurities. Maybe he's trying to protect because he's been hurt. I don't know what it is, but all I can tell you is that he is basically opting out of this marriage by shutting down constantly. So we had like a life-altering thing in our family. And that was kind of like, it kind of made me think.

Starting point is 00:26:16 like, hey, life is, life is really short. It can change on a dime, right? So I was like, okay, like I want to sit with a financial planner. Let's get our things in order. Let's like, whatever. I thought maybe that would encourage, you know, because it was a big deal. Yeah. And it affected all of us. And I thought, okay, this, like, this is going to encourage us to, like, get things in order. And he just, he absolutely said, no. Like, he's got stuff on the computer. Everything is password protected. Oh, boy. Do you think there's something more nefarious happening? I don't think so. I just feel like either one of two things. Either he's got more money than I think he does and he doesn't trust me or he's super poor and he doesn't want to tell me.

Starting point is 00:27:07 So how are Mandy, for the sake of just me assessing like your security in this, how much money do you have? Like what do you earn? What do you have in your name? Tell me about you for a second. So I make about $70,000 a year. My house is paid off. My car is paid off. I have little to no debt. Like, I mean. The house that you guys both live in is paid off. Isn't it is in your name? It is in my name. Okay. Like I owned the house before we were together. Good. And then your car is paid off. So you don't have any debt. Not really. No. to speak of like $3,000 in credit card debt. Okay. What's in your retirement? So I have a retirement through my work, which is currently like at $50,000.

Starting point is 00:27:58 And I also have like a state pension. So I'm a state employee. Okay. So so I have that as well. So I just wanted to know how part of that like how together you are and you're on your way. What I would do if I were in your shoes is I would have some real adult talk, which is in basically setting a very clear line of here's where I am and here's what I'm going to need in order to go forward. Because the way that the marriage is running is not working for me. It's not valuing me.

Starting point is 00:28:36 There's no trust in me. I'm not saying that you've been angry or like, you. like combative in any way, but I am saying that you've shut me out and I can't be in a marriage that I'm shut out of. And our money is a huge part of our life. It touches everything. And I'm feeling very, very put out by all of this. And I've made these attempts. I don't think I need to list them because you know about them and you have shut me out. And so now I am saying, here's what I need in order to proceed. We have made it about you and I've let you do your thing and now I'm about to do my thing. That's basically the conversation I would have. And I would say, here's what I need

Starting point is 00:29:18 to go forward because today I'm not safe. You've shut me out. And I don't know if that means that you have millions that you don't want me to be a part of or if it means that you owe millions and you don't want me to be a part of. I don't know. I don't know you. You're not letting me know this part of you. And I've suggested counseling. And so this is you, Mandy, at this point, this is you about you deciding how strong you want to be on the matter. Is this going to be something that you can because the ball's now in your court. So your decision is, am I just going to swallow this and be like this for my marriage and decide that I'm going to be fine with it?

Starting point is 00:29:52 Or am I going to decide this matters this much to me? And I think that's exactly right because, like, as many times as I've suggested counseling, I myself have gone to counseling. You're doing your part. I am. I'm cleaning up my side of the street. And I think that is what has helped me. like see things through a much clearer lens as how much I'm being boxed out.

Starting point is 00:30:20 Yeah. Yeah. Because you're getting healthy and now it's causing you to see the unhealthiness. Yes, very much so. And I'm like, I kind of feel like maybe I'm overreacting. Like, is this enough to like be done? You're not, Mandy. And if he makes you feel that way, that's what the kids call gaslighting.

Starting point is 00:30:39 You are not the crazy one. You are asking for something very reasonable. Hey, I sign up for life together with this person and you are boxing me out completely. I feel anxious. I feel disconnected. We need to be on the same page and on the same team or else this can't move forward. I'm so sorry you're dealing with this, Mandy. It's not an easy thing.

Starting point is 00:30:57 We can't change people. We can control what we can control. And that's us right now. So focus on you and what you can do. 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.

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Starting point is 00:33:00 Yeah, how can we help today? Okay, so my husband and I are on baby step number two. We are $619,000 in debt. Most of that is a mortgage. And so my question is really going to revolve around that. But just giving you a little background, we've been in a new home for about a year and two months. Our mortgage on that is $5.25. We inherited a parent plus loan last October and $25,000 for $65,000.

Starting point is 00:33:34 And we have a 401K loan that we use to get into this house and we owe $29 on that. we do own our cars and there's no other debt. So my question is we're both in our mid-50s. We're on baby step number two. We really just need a clear plan on moving forward. How, when, what do you recommend for trying to get to retirement? Our 401K is currently frozen. It only has $60,000 in there.

Starting point is 00:34:01 Okay. So we're really wondering, should we sell and rent until we save up enough to we buy smaller. We also don't want to live in this area when we retire. We have family in another state with grandbabies. So I know that's a lot to unpack, but whatever advice you can give me, I'm all yours. Yeah, sure. So tell us about your income.

Starting point is 00:34:24 Tell us about your working life. What are you guys earning together and what do you take home each month? Okay. So I'm a stay-at-home mom. We've got five kids. I'm on the last two. I have been home for 22 years. I don't make an income. He makes an annual of about $200,000. Okay. So our take home is about 10 a month.

Starting point is 00:34:45 10 a month, you said? Mm-hmm. 10,000. And how much of that is the mortgage? Our mortgage just went up an additional $500 in January due to, they call it an assessment. So our mortgage payment currently with HOA is running about $4,700 a month. Oh, wow. That's really high for your income. So there is, I mean, that alone would cause me to say, yeah, you've got too much house. And then you've got the debt on top of it. And there's not, unless you tell me there's something that's going to happen drastically with income, you're up against it. That's probably why you're seeing almost no margin, correct? Okay.

Starting point is 00:35:30 Yes. It's going to be hard either way. So let me lay out some options for you. One is you go to work full time. we drastically increase the income, we're able to clean up the parent plus loan on 401K loan fast, keep up with the mortgage and invest for retirement. Is that a viable path? Well, I school my two children.

Starting point is 00:35:51 How old are they? So we can talk about that. They're 10. They're twins. Okay. And is there an option? And, you know, I know homeschooling is a real values thing. So it's not a thing where I go, well, just put them in public school and get to work.

Starting point is 00:36:03 But there's a reality here where you guys can't retire and you can't, this house, which means there's no home to homeschool in. That's my fear. And so homeschooling, all of these things, it's a luxury to be able to do that, to stay at home to homeschool. And right now, you guys can't afford the luxury. And so it's either that or you sell, you go rent somewhere. And I don't know, can you rent somewhere for $2,000 a month, $2,500 a month in your area? We would have to go outside the main area, but it is doable. We would just have to downsize, which we're both willing to do. Okay.

Starting point is 00:36:40 We're both very open to whatever we can do. So we're willing to do that. Yes, we would just have to leave this area, and it would be just a small commute. Okay. For my husband's employment and for some of our activities with homeschooling, but that would be fine. Okay.

Starting point is 00:36:54 What's the equity in your house? What would you take away? We've lost. We've only been in a year and a half, so we've lost equity. And with fees and all that, so you'd walk away, maybe owing money? If we, okay. So if I was honestly going to sell today, we could probably after fees walk away with maybe $60,000. Oh.

Starting point is 00:37:15 That could almost knock out the parent plus loan. Yeah, that's not what I thought you were going to say. I thought you were going to say we would make zero if we're lucky. That's what I thought. Okay. So that's a huge change in the conversation in a short amount of time. So that makes me feel better about the idea of downsizing is the fact that you could actually make some progress. very quickly by getting these parent plus loans out of the way. And then that would just leave,

Starting point is 00:37:43 well, technically you do the 401k loan first. But you know what I'm saying. It only leave the 35,000 there for you. Which means if you threw $3,000 a month, which your savings from the mortgage down to renting plus any extra margin, you could clear all this by the end of the year. So think about that. By the end of this year, you could be renting completely debt-free and start to save up some money in your emergency fund. That would create a stable foundation. for you guys to then be able to invest his amazing income. That is the saving grace here is he makes really good money. The hard news is he might need to work longer than he wanted to in order to be able to retire and support the family. Yeah. And that also gives you the ability if you decide that

Starting point is 00:38:24 you can pick up some income and that you can work. It just frees you up a little bit more to be, to value that system that you have in place a little bit more. Because if you keep this house, you can't. It's like, I have to work. It's a pressure cooker. Right. And we need to release some of this pressure right now. And I hope one day you guys get back into a house and it's not stressful and you can easily afford it and you have no debt. You have plenty of savings. You're on track for retirement. That's the goal. And that's why we tell people to move real slow when it comes to a house and do it when the timing is right. And so there's viable options here. But again, it's sacrifice all the way around. There's no shortcuts to living the life that you guys want,

Starting point is 00:39:05 you know, having the cake and eating it too. That's right. And so I wish you the best. Got a shake. Yeah. Thanks for the call. A very good situation. You can make up for lost time on retirement fast, making $200 grand with no debt. Absolutely. Absolutely.

Starting point is 00:39:16 Yeah. All is not lost. All right. Let's go to Michelle. She's in Norfolk, Virginia. What's up, Michelle? Hi. Hey, what's up?

Starting point is 00:39:27 So my question is, I'm wondering if I should quit my job because I have one daughter in daycare. and then we tried for another, and surprised we had twins, which was not in the budget. Yes, which was not in the budget. So the question is, should I quit my job to stay home and take care of my children because I don't bring in enough to cover daycare fees? Or should I hold out for about three to six months and just kind of take the loss while I'm aggressively trying to find another job because I'm not trying to have like a lapse in my resume. I mean, there's two questions here. One is, do you like working and do you want to work?

Starting point is 00:40:18 Do you see what I'm saying? Like, is there a part of you that wants to work? Or do you prefer to stay home? And this just gives you the out to do it? So I like working. I grew very financially insecure. So I get really nervous by not having. having a job or any income coming in. Do you need the money? We would be, we'd make due without it. Like, we don't need it, but it's... What does your husband make?

Starting point is 00:40:51 He would also be... He makes $6,500 a month. Do you have debt? No, we have about $65,000 in the bank saved up. Great. No debt. We have a little one to... Well, our mortgage.

Starting point is 00:41:05 But, okay, what's your mortgage payment every month? Um, 2,800. Okay. So can you guys make it work off 6,500 take home pay with no debt? It feels reasonable. Um, yeah, but daycare is going to cost, like, so I make 3K and daycare is going to cost four grand. But I'm saying that he makes 6,500 a month. Oh, yes. So even without you working, you have 6,500 a month to work with. Yeah, it's just diapers and formula and all if you worked part-time. What if you split the difference and you did a part-time? And you did a part-time. kind of half day with the kids, and then you did a part-time job and split the difference. I mean, I'm open to that. I'm just, I, you have to figure out what my advice to you would be to figure out what problem you solve, because I hear too. But diapers and wipes and formulas,

Starting point is 00:41:58 not thousands of dollars a month. And so we also have to be realistic and look at the numbers. Oh, yeah. So I would just make a budget tonight with your husband, using every dollar, just his income, go, here's what our future life would look like. And if the math checks out, you go, yeah, we can make this work. Then go for it. Stay home. But if you also like the security, that's why I said you're solving for a couple of problems,

Starting point is 00:42:17 because if you like the security of working, you can work part-time, and that's great too. Nothing. You got options here. You got options. Just figure out, is it, I want to be home, do I need a job, do we need the money? Those are the three areas you need to get answers for.

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Starting point is 00:43:22 Hey guys, welcome back to the Ramsey show in the Fear Wins Credit Union Studio. I didn't say this before because George, I think they already know, but you're George Campbell. I'm Jade Warshaw. Thank you for telling them. They may not have known it from last time. They know this voice a mile away. Who's that sultry, smooth, cowboy tone, right? That's George Campbell. Cowboy, I like it.

Starting point is 00:43:41 All right. You keep saying that, George. All right, we're going to go to Stacy in Portland, Oregon. What's up, Stacy? Hi, how are you? We're doing good. Just living it up. Chopping it up.

Starting point is 00:43:55 Oh, great. So my, what I'm looking for is some advice. on how to speak to our kids about just the way different families live their lives in return to spending, or excuse me, in regards to spending and debts. You know, we've always stuck to a budget, avoided debt, and just lived within our means. But we have family members who are constantly being very irresponsible. They're leasing cars and defaulting on payday loans and all of this. Wow. Yes.

Starting point is 00:44:27 How do the kids know about it? well they don't so the problem is that our kids just see the outside they see their cousins get to do all these fun things and have a nice new car and get to go out to eat and we don't do as much of that stuff underbelly so they're throwing a tantrum because they're going mom why do they get all the cool stuff we want cool stuff and you have to be like because we don't go into dad well yeah we kind of just brush it off we don't really say that. So that's kind of what I'm wanting to know is how can we speak to them? They are nine and 11. Perfect. That's a great age because they can understand this script, right? Say, hey, every family does money differently. And our family, we don't go into debt. And that means we don't borrow to buy stuff because when people borrow, they get things now, but they have to pay for them later, which is stressful. We choose to wait and save instead. And that's why our life looks different. And the tradeoff is worth it because we don't have debt.

Starting point is 00:45:29 means we have more freedom and options and peace and more time together. And for something you really want, we can make a plan for you to save up and get that thing or have that experience. We don't say never. It's just we don't do it with borrowed money. That's how we live. Would that hit with him or would they go, all right, I'm going to go play video games? Probably the latter. And that's fine. I'll be, let me put it like this, because my son, I literally had a conversation with him last night. He's not nine. He's seven. My kids are five and seven. And last night, it was like, hey, how come I can't play K-pop Demon Hunters? And I said because I don't think that's an appropriate game for you.

Starting point is 00:46:10 So I start with a very kind of like high level because sometimes I can get away with a high level because that's just not an appropriate. Papa and I don't think that that's an appropriate game for you. Okay. Sometimes he'll take it at that. But then he took it the next level. He said, well, all my friends are playing it. to which I said, Prince, your friends, they have parents, and sometimes your friend's parents don't

Starting point is 00:46:32 value the same things that me and Papa value. And we value making sure that you're always at an age appropriate level with the things in the games that you play. Some parents don't value that. That's their business. It's not our business. And so it's almost like that with money. It's the same thing of saying, hey, you're going to see people spend their money in ways that are different from us and that's just a reflection of our values. In this house, here's what we value. And I think that if you can frame it up from that set of values, it actually helps you answer a lot of those questions in the same way. Do you know what I mean? Because then you can always go back to values. Well, in our house, we value this isn't that. And so that doesn't align. Simple as that. Does that help at all?

Starting point is 00:47:18 Honestly, Stacey, you're further down the parent train than I am. So I mean, how do you, how do you, if you're kids framed up something like that that they want to watch a movie that you don't approve of or they want to go someplace with their friends that you don't approve of. What would you say to them? No, that is pretty much how I would handle it. Pretty much the same thing is just, you know, different families do things different. Yeah. And what works for us doesn't always work. But the only thing I worry about, and I don't know maybe I'm thinking too much about it, is they have cousins who are close in age, and I wouldn't want them going off and saying, oh, my parents say your parents are in debt, and they're doing things wrong.

Starting point is 00:48:02 Well, that's why you go to the value side, and that way you don't have to talk anything about what they're doing. It's just too talking about. You're not throwing shade at them. You're just saying, hey, we don't have the money for that thing, and we're not going to borrow money to do it. And so if they go to their cousin's house and say, well, our mom says that we don't, we're not going to go into debt for it. We can't afford that right now. Fine. If they want to,

Starting point is 00:48:23 you know, judge you for that or, you know, the family wants to judge you for that, that's fine. You're going to get judgment from family regardless, no matter what you do. So you might as well do it dead free. Okay. All right. Well, thank you very much. Yeah. Absolutely. No worries. I think it's going to take some several conversations. I don't think it's a one time. With a kid, it's like, you need to say it 20 times and maybe they'll get it on the 21st. Yes. And even when they're younger, sometimes I feel like you want to talk about. it more than they even care about it. It's like they just brought it up, but then they're already on to the next thing pretty quickly. Now at 9 and 11, yeah, they might keep hounding you,

Starting point is 00:48:57 especially if it's something they want to have and they keep continually seeing it. But at the end of the day, man, values. Yeah. Tying it back to family values goes a long way. I would go to my friend's house, my cousin's house, and play with all their toys that they bought. And I had a great time. I'd go home and I had my stuff. Yeah. I'd sneak over to grandmas if I wanted to watch cable. Oh, absolutely. You know? Absolutely. And so I didn't feel like I needed to have it personally. I just wanted access to it.

Starting point is 00:49:23 You just bum it off somebody else. Exactly. Our neighbors had all the best Nintendo games, and so we would go over there, and their parents would buy them. Like, they never ate at home. So everything was like, do you want McDonald's or Taco Bell or Burger King? And if you were over there at just the right time, listen, you're getting a happy meal. Ooh.

Starting point is 00:49:40 Great. This happens as an adult. Like, I love to be on a boat. I am not going to buy a boat. I just want a friend with a boat. Yes. Who's happy to take us out on the boat. Yes.

Starting point is 00:49:49 That's the key in life. The key in life is knowing that. And it's also to know, like, sometimes you're around your neighbors and you think I should have the same lifestyle as they do. After all, we live in the same neighborhood or after all, maybe we work at the same workplace. But at the end of the day, at the end of the day, you don't really know what their life is. And so you have to also be careful not to make that comparison game. Kids can do it.

Starting point is 00:50:16 But our cousins have this. But if adults do it, it can get. At some point, you've got to mature and go, I don't need to look at my neighbor's bowl to see what he has. Yes. Unless I want to make sure he has enough. Yes. That's the only time to be looking over.

Starting point is 00:50:30 Yeah. To see opportunity to be generous, not to be envious. Yes. That's just that you're drinking a poison. I always think about, I think it was Kevin Hart. I think it was the laugh at my pain comedy special where he was talking about going out. I think it was this. He was basically talking about going out with his celebrity friends.

Starting point is 00:50:47 And it's like, if you're friends. with basketball players. Like, it's really easy to think, oh, we're on the basketball team, so we all make good money. But if you're the starting player, like, if you're on the starting team, you make a lot more. It's a different world you're living in. Right. So you have to know that showing up.

Starting point is 00:51:02 Like, hey, I don't have, we might all work at the same place or we might all live in the same neighborhood, but it does not mean our lifestyles are supposed to look the same. And I liked that basketball team kind of analogy to remember, we're all wearing a jersey, but it does not equate to the same life. And that's going to happen all over in our normal lives. We all have friends who make a lot more than us, that make a lot less than us. And you treat everyone the way you'd want to be treated.

Starting point is 00:51:28 You never belittle them. And you understand. Everyone's in a different place financially. That's okay. It's all good. That's their business. It's all good baby baby. Cost you $0 to mind your own business.

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Starting point is 00:53:12 Use the promo code Ramsey to save 20% That's mama bearlegalforms.com promo code Ramsey. All right, all right. To the phone lines we go. We've got Carol, who's in Cincinnati, Ohio. What's up, Carol? How can we help today? Hello, Carol.

Starting point is 00:53:40 Hello to you. My husband and I are older and retired. I'm 75. He is 80. We have a 52-year-old daughter who still lives with us. Oh. He is single. and she has always been under-employed.

Starting point is 00:53:58 And we can afford to have her here that she is annoying. We would like to be alone in her old age. I bet. Is there a way to get her out? Yes. You need to go. Kicking her out. Closing the door, changing the locks.

Starting point is 00:54:15 I'm being dramatic, but yeah, there's a way to get her out with you. Well, she has over her lifetime. 52 years. She has lived with us almost all the time. She had two boyfriends that she lived with for a while. One of our sons took her in for a year. And that helps us out a lot. But he says she cannot be here anymore. And none of our other kids will take her in. Why does anybody need to take her in? Does she have any disabilities? Does she have anything that precludes her from living in life? From working? Yeah. She doesn't want she doesn't want to work. She doesn't have to. But she hasn't had to.

Starting point is 00:54:56 She's right. And we have enabled this. We need to. Okay. Good. You know that. Learn how to not enable her. Then the way you learn to not enable her is to stop the behavior today.

Starting point is 00:55:07 Because she knows you guys will be a dormant and just keep going and let her come back and keep covering the bills whenever she's short. And so instead you go, hey, you need to leave by the end of this month. Yeah. By the end of this month. And then you have to evict her because likely there might be actually be some laws around this because she's lived there for a while where she's. mail there. This is like a tenant. And so I would actually look into your state laws and you might

Starting point is 00:55:30 need to contact an attorney to do this right. I don't know how wild she is. She comes after you guys to sue, but you want to make sure you do this right. Okay. I realize that we should legalities with this. I mean, she could. She's living for 30 years. She's basically squatters rights at this point. So you might need to give a written notice and say, hey, you need to leave by this time. And the decision's final. You cannot let her back. in. She needs to figure it out. She needs to spread her wings and fly. Okay. And there's going to be backlash, isn't it? What is she going to do when you tell her this? Well, she will probably yell or she will probably cry or she may just dump out the door and say you'll never see me again.

Starting point is 00:56:13 Okay. Well. That's her choice, though. And 52 years old, if she does that, then you're just going to have to let her do that because that's the behavior of not a 52-year-old. practically speaking, Carol, here's exactly what I would do. You and your husband, I would sit down tonight. Maybe when you get off this call, you and him huddle up and say, here's what I heard on the call. Here's what we're going to do. You're going to sit down and you're going to say, daughter, this has gone on long enough. We have decided that you are moving out. Not that we want you to move out, not that we need you to move out. Say it clear. We've decided that you are moving out. And you're going to move out at the end of the month and you're going to move into your own

Starting point is 00:56:53 place. It's up to you what you choose. Now, Carol, I don't know. I'm not saying you have to put her on the street. Do you know if she has any money? Because if you, if you know that you know that she has $0,000, what you and your husband could decide to do is make sure that she at least ends up in a place, right? You can make sure there's a place for her to go to and you have it set up that she can go there, meaning maybe it's first and last month's rent is paid so she can get into the place. But it's up to her to keep the living expenses going. And you let her know that, say, we have, you know, and I'm just making this up, we know that you don't have any money. So we're willing to pay first and last month's rent, which is X amount of dollars, no more, no, you know, no more than that.

Starting point is 00:57:39 And up from there on, it is up to you. And we have also decided that we're prepared to see this through to the worst extent. We're not, we're not worried about you becoming homeless. We're not worried about you not having a place. We're not concerned about that. We have the full confidence that you can do this. So please do not come and ask for any money because we will not be giving it to you and make it so, so crystal clear. I love you, but this has to stop for your good and for hours. And that's the conversation. And she's going to yell and kick and scream and you're going to go to bed and you're going to drink a warm glass of milk and you're going to sleep the best sleep of your 75 years. This is going to be probably the hardest thing you've ever done your life, Carol, because deep down, you love this woman.

Starting point is 00:58:28 You want what's best for her, and you feel guilty, you feel shame for enabling this behavior and allowing it to happen. You don't want to see her on the streets and have her life take an even worse turn. But this is the best thing you can do for her because her growth has been stunted for far too long. And if she lives another 30 years, she needs to live it freely with independence, not codependent on mom and dad in their old age. Well, we're going to die We all are, Carol, that's good advice Yeah, it's coming for all of us No one escapes it

Starting point is 00:58:59 And so you need to have a real serious Calm conversation Telling you, here's what's going to happen Does your daughter have any addictions or anything That you think could rear its ugly head? Okay Has she ever been violent? If he was a teenager, she's been violent

Starting point is 00:59:17 Okay, I'm just, I'm wondering, just for your Anything a teenager could do, I don't think she would. Okay. However, she could be suicidal. She may say, okay, there's no point of living. I'll just go and it. Is that her doing that just for attention, or does she really mean that? She's tried it two and three times.

Starting point is 00:59:35 Okay. Wow. So then making sure you know. Making sure you know, and I'm sure you've had some sort of counseling on this, what to do in those situations and what your role is in those situations. I don't think your role. is to let her move in again. I think your role is to get her set up with counseling, right? Yeah. And that's the way to do with kindness. Hey, we're going to cover six counseling sessions for you

Starting point is 01:00:04 and cover first and last month, but you have three days to vacate the premises. Otherwise, we're going to have to file an eviction and it's going to get ugly. We don't want to do that, but that would be the next step. Okay. And have the non-emergency police line ready to go in case things take a turn. I don't know. And so that's... That's the scary part, the unknown, and it's probably why you've put this off for so long, because you don't know what's on the other side of this. It could get worse before it gets better. We don't want to die.

Starting point is 01:00:34 We don't want us to get killed in the streets, but we also would like to have a quiet piece of home. And that's fine. Carol, you... It's about time. That's totally fine. You're not asking for something crazy. You're not shooting for the stars here. I just, I think that for you, your piece in this is just understanding that.

Starting point is 01:00:55 that your daughter's totally grown and she's going to make decisions that you cannot control. And she could make many decisions that you do not like that you can't control or that you know are bad for her that you can't control. And so for you going into this conversation, as much as you can start to just really make some peace with that and almost prep yourself for that feeling because something's going to happen that she's going to lash out and you're going to want to do. that old familiar song and dance. Yeah. And she will expect it. And so will you. And it's going to come knocking at the door.

Starting point is 01:01:34 And so you're going to have to be prepared mentally and physically. And same thing with your husband, because if he folds, it's a problem, right? So you guys have to be. He is more on this than I am. Okay. Good. So you'll have to do your due diligence to make sure you're loaded for bear when this comes because it's not going to be easy, and you know that.

Starting point is 01:01:59 And I would warn her, say, hey, we're going to have a hard conversation tonight. I want to let you know it's going to be uncomfortable, but we need to have it. Okay. Yeah, we're not coming in cold, busting in her room going, you need to get out yesterday. Yeah, don't do this. That's so good, George. Don't do this out of anger. Like, if something happens and she comes home tonight and there's an argument, postpone the conversation.

Starting point is 01:02:20 Because you can't do this with a hot head. You have to do this when you're in your most. cold state. You're Zen. Yeah. You're Zen. Oh, good luck. This is not, I don't envy you in having this conversation.

Starting point is 01:02:33 But it's so hard because you can't control the past. You regret it. You can control what you do now. But then you can't control how they react and what they do next. And that's the hard part. You're like, I want them just to go get a job, start paying rent, and have a great life. Yes. But that part is not up to you.

Starting point is 01:02:50 You know what? Christian, send her a copy of my book, what no one tells you. you about money. It's not a money conversation, but you will love Carol, the chapter on guilt and shame, especially when it's about something that someone thinks you did not do, even though you know you're doing the right part. It'll help you. This show is sponsored by BetterHelp. All right. As we head into the new year, I want you to take an inventory of all of the junk you're carrying. You know all those things you have to do, all those things you think you should do, all of the past hurts, all the past pains, all the past guilt and shame, all of it. When the world feels heavy,

Starting point is 01:03:44 it's important to look in the mirror and consider maybe for the first time setting down that old weight and choosing not to carry it forward into 2026. Therapy can help you identify the heavy stuff, set it down, and move forward with clarity so you can focus on who you want to become in the new year. If you're thinking about therapy, check out my friends at better help. With over 30,000 therapists, BetterHelp is one of the leading online therapy providers in the world, trusted by millions. They have an average rating of 4.9 stars out of 5. And it's easy to fit into your busy schedule because it's totally online. To get started, just answer a few easy questions and BetterHelp will connect you with a licensed therapist who will fit your needs.

Starting point is 01:04:28 And if it's not the right fit, you can change at any time for no extra cost. You can't feel lighter without leaving behind what's been weighing you down. Go to BetterHelp. dot com slash ramsi to get 10% off your first month that's better help help dot com slash ramsie you're listening to the ramsie show thanks for hanging out with us all right guys let me tell you a little something about our tax pros do you have the sheet george i was about to read it oh here it just gave it to me i'm special i'm not i found it you want to you want to tag team this with me is that what you want to do okay i'll read the first one george i don't know if you know this but one of the best things you can do for your finances is to have a really good tax pro in your corner that you can trust.

Starting point is 01:05:23 Absolutely. They'll help advise you on the best moves to make for your situation or for your small business, especially if you've had some big life changes in the past year. That's right. So go to ramsysolutions.com slash tax pro to find CPAs and enrolled agents that have been vetted by the Ramsey team. So, so important. Speaking of the team, what a great team we just made. Smoothies butter. Jelly. I love it. Ryan in Columbus, Ohio is up next. Hey, Ryan. Hey, how are you?

Starting point is 01:05:51 Hey, my question is related to starting a small business. I am 23 years old. I have my own auto repair shop. I've been running it for approximately a year. I set up the business in January of 2025. The thing I'm running into now is I started out in a very small one bay garage building. I've got a single service bay, very small space. I did that all with cash.

Starting point is 01:06:16 That was my gold stuff out without borrowing anything. Now I'm running into the issue of I've got customers that I'm losing their work because they don't have the space and efficiency to get it through. Sure. Because of, you know, I tear something apart. I've got to give it out before I can get something else in, you know, that kind of thing. And so I'm wondering at what point the balance is between gaining efficiency and borrowing to do so. I'm trying not to borrow, but I feel like I'm really losing efficiency. efficiency and traction because of it.

Starting point is 01:06:50 What would it take financially to expand in cash? Well, I've got, in the end of 2025, I was able to mostly cash flow the shell of a building that's going to be a three-bay shop building. It is on my own property. So I own the land. There's no additional lease or anything like that. I had a contractor put it up. That cost me about $30,000 in the building package.

Starting point is 01:07:17 It's just the shell, just very basic. shell of a building. What about to build the rest of it out? It is currently sitting there like that. If I had another maybe 30 to 40, that would get an insulated, heated, ready to go to be able to make money out of it. What are you taken home from the business every month? Last year, I basically didn't pay myself. I was living off of personal savings for my personal bills. That, of course, only lasted for a certain amount of time. This year, my goal is to pay

Starting point is 01:07:47 myself approximately $3,000 a month, and that's what I have it set up for this year. Last year, I paid myself like $6,000 out of the business. Are you working full-time on top of this? No, no, this is my full-time job, December of 2024. That's awesome. Okay, but you've made $6,000. That was what I paid myself as a salary. Yeah, you made $6,000.

Starting point is 01:08:12 I'm telling you, you made $3 an hour doing this last year. Do you understand? on this? No, so let me be clear. So I was only working full-time for myself. I was doing some other part-time gigs at the beginning of the year as work picked, customer work picked up. The business itself had a gross revenue with customer work of $120,000 last year.

Starting point is 01:08:33 And the net, or the gross profit, I should say, after cost gets sold in labor cost, was about $80,000. That's how you were able to do the three-bay deal and all that? Correct. So I would just investing all the profits. personal salary, correct. But that can't go on forever. Obviously, this year I'm hoping to actually create a sustainable salary for myself. How long will it take you? If you pay yourself that 3K a month, how long will it take you to take some of the earnings out of the business and save up? Well, the 40,000,

Starting point is 01:09:04 but what I really want to ask, and I'm sure you've turned this around every which way, is there a way that you can get that three bay shell? What's the, least amount of work that you need to do on it, just so you can get in there and get some business going. I could put concrete and garage stores in for probably around 20 to 25. Okay. How long would it take you to get that? That would tell the winter.

Starting point is 01:09:33 So that would probably take me, that's probably a stake in, you know, maybe the next six months I want to say before I could comfortably feel like I could write those checks. Okay. So six months gets us. kind of thing. Six months gets us a platform and the doors that we need. And after you have that installed, would you be able to do a little bit of work out of there, a little bit of business out of there? I would be able to move my main operations into there. It would just be that within a couple of months after that. I would be needing insulation and heat, which is kind of like where

Starting point is 01:10:01 the rest of the money comes in. But at least you could start making money out of it. The point is you could at least start making money out of it so you're not having to turn away business in six months, plus actual work, right? And then I feel like once I've got some more space, it's going to be more equipment and all that stuff that's going to be, you know, that's where the thousands and thousands add up. Would that be just something that I would just, I know Dave says about being on the cover of Slow Magazine, and that's really what I feel like right now. Yeah, that means you're doing it right. You're doing the next smallest step that you can take. So right now, and you tell me if I'm wrong, but the next baby step is I'm going to spend 20 to 20,

Starting point is 01:10:45 doing the garage and the doors, and I'm going to kind of move everything over there. Now I can start taking on more customers. Now I have more cash flow coming in, so I should be able to pretty quickly add the insulation, and now that's going to create a better environment for everybody. I can keep, I've now tripled the amount of work I'm doing because I have three spaces now, and now I can keep going, and you should be able to whatever the machinery and things you need. The more that you're doing is the more money that you'll come in to be able to do, if that makes sense.

Starting point is 01:11:16 I'm just worried right now. I'm losing business because I'm not able to, you know, get stuff in fast enough for people. You are, but that won't be for long. It's not going to hurt me long term. But it's not going to hurt you long term because you're going to do this in six months. So you've got six months to kind of grid it out.

Starting point is 01:11:34 And, I mean, there might be some solutions that you can figure out in the short term. But understanding that I'm kind of having the short term suffering, which is, ugh, I hate the feeling of turning business away, but also knowing that in six months, you're not going to have to do that. And there's no payments to be made and no debt to pay off, which just increases your cash flow.

Starting point is 01:11:54 If everything would fold up or if I would break my leg or something, that it wouldn't be eating me up on payments while I'm not able to produce an income or that kind of. Yeah, you're just adding risk to the equation. If everything else would pull up. You're not going to be gaining efficiency. I feel like I'm making money. I don't know how to fix cars is just that it's very, very slow because everything costs a lot.

Starting point is 01:12:14 So what's your, what's your, you tell us what you want to do? What do you want? What's your gut telling you to do? I don't want to borrow money. Then don't. There's no, you said at the beginning of the call, I want to try to not borrow money. Instead, rephrase it. I'm not going to borrow money.

Starting point is 01:12:31 I will move at the speed of cash. I feel like everybody in my industry, I feel like everybody in my industry is making payments on everything. And I feel like I'm kind of the slow dog. That's fine. You ever read the tortoise and the hair? Rread it tonight. It'll be a good reminder.

Starting point is 01:12:44 It's one of Dave's favorite books. Because here's the thing. It's really hard to fall flat on your face and have this business fail if there's no debt attached to it. What you're really buying is freedom, even though it's going to take more time and it's moving slower. And the guy next door is crushing it because he's got a bunch of payments and it's working for him. But man, you are a solopreneur. And I can't tell you how many small businesses fail because they're over leveraged. And they thought they'd have the customer base.

Starting point is 01:13:10 They thought they would make money. and the lender doesn't freaking care. They want their payment every month, regardless if your business succeeds or fails. And I think I'm 23, I haven't been an adult long enough to be learned patience yet. Well, no, you have. You have. I'm going to tell you right now, when you called in, Ryan,

Starting point is 01:13:28 and you told us what you did, I was immediately impressed, which George knows is hard for me to feel impressed by anyone. Because I immediately was like, wow, this guy's patient. That was my first thought is like, wow, this guy's really been patient. When you explained to us how you built this, I thought, well done. And so I think you already are patient. I think what's happening is what happens to all of us, which is you kind of had your, you know, like horses. They wear the thing around their eyes so that they can't see to the right or left so they don't get spooked.

Starting point is 01:13:59 You know what I'm talking about? I think that that I think the blinder came off and you look to the right for a second and it spooked you. And you're like, oh, maybe I'm not doing it right. Maybe I need to go on another path. Maybe I need to put your blinder back on. and keep focusing on your business. What you've done is working. You're so successful that you can't keep every,

Starting point is 01:14:18 you can't take all your customers. You're so successful. It's a good problem to happen. Now's not the time to go do something else and go into debt. Now's the time to keep steady, keep going on your path. What got you the business you have

Starting point is 01:14:30 is who you are. You're great at fixing cars. You do what you say you're going to do, right? Let that follow you into this next phase of your business. 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?

Starting point is 01:15:03 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 you're telling me, and for decades, Dave, I've sat across people who've lost a spouse.

Starting point is 01:15:20 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.

Starting point is 01:15:37 That's exactly right. These are the two options. And take care of your dadgum family, man. Term life insurance can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad. Yeah. To just miss you. That's exactly what it's supposed to be.

Starting point is 01:15:51 It's saying, I love you to your family. 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 Xander.com or call 800 356-4282. All right, the Ramsey Show question of the day is brought to you by WIREFive. Hey, you don't have to stay stuck in defaulted private student loans forever. Why Refi helps borrowers take back control with affordability, refinancing options that actually work. Learn more at yrefi.com slash Ramsey. That's the letter YR EFY.com slash Ramsey. And remember, it may not be available in all states. Today's question comes from Glenn in Virginia. I've been looking at my credit

Starting point is 01:16:52 report to make sure I'm including everything I need to pay off in my debt snowball. If an account is listed as closed but still shows a balance, do I still owe that money? If so, should I call them and set plans to repay what I owe. Good question. Well, closed just means the account is no longer active. So if you closed it with a balance, that's a normal thing to do. It may have been, you know, charged off in collections. But you want to look for those key phrases. Paid in full would be a nice key phrase to see that it's actually paid. So you likely still owe the money. Closed with a balance does not mean it's been forgiven. It just means it's not active there. So I would call them and set up plans to repay what you owe because you likely do. Oh yeah, definitely, definitely. And doing

Starting point is 01:17:37 it based on your credit report, that's a good place to start because sometimes there are things that are actively holding a balance, I should say, that you don't know about it because maybe you moved or they stopped sending you notices or it went to your spam account, anything like that is possible. And it's a good, you can check it for free. Never pay for this. You can go to a website annual credit report.com and pull it from all three credit bureaus without paying a dime. And it's course doing. Very, very good. Let's go to Victor in Chicago, Illinois. I love that name, Victor. What's up? Hello. Thank you for taking my call. You're welcome. So I am currently in 50, like 50K, a little bit or

Starting point is 01:18:19 50K in debt with credit cards, personal loan and a vehicle. Okay. So my question is how smart or would it be for me to not close out but take out a big chunk of my 401k, which is about $62,000, to pay out most of my debt? It would be

Starting point is 01:18:46 a mistake. From the smart to dumb spectrum, it's pretty much as far as you can get on the dumb side. The idea of paying off the debt is not dumb, but doing it in that way to George's point, George's point is, would not be a smart avenue.

Starting point is 01:19:02 Now, go ahead, George. I want you to think about what's actually happening here because a lot of people just go, well, I can break into the piggy bank in case of emergency. But here's what actually happens when you pull 50K out. It's more like 75 and 90K because you have a 10% early withdrawal penalty. So 50K, you pay $5,000 right there. Now you've got federal and state taxes, which could be, you know, 20, 30%, another 10 to 15K. And so to net 50K, you'd have to pull out 65 or 70. plus that money is now pulled out forever.

Starting point is 01:19:32 And if you pop in 50 grand, how old are you? 38. 38. From 38 to 68, that 30-year gap of that 50K growing for you would be hundreds of thousands of dollars. And so you didn't make a $50,000 mistake. You made one with a lot more zeros on the end. And so you're robbing from your future

Starting point is 01:19:51 to put out a current fire. And so there's better ways to do it. So let's get into the better way. Are you with me that you're not going to do this? Yes. Hallelujah. Okay. So what is the 50K in debt?

Starting point is 01:20:04 Break it down. Personal loans for, I believe it's 32 left to pay off. 32,000 or 32,000? Okay. To pay off. And credit cards add up to about 10,000 and the rest of the car. Okay. How much do you make a month? Roughly about 5k.

Starting point is 01:20:34 Okay. So we're bringing home 60K. We got 50K in debt. And so this is a math problem to solve, which is we need more income and we need to cut down our expenses down to the bone. So the question is, what caused you to get here? What did you spend the money on from these personal loans and credit cards? So first I racked up the credit cards Credit cards between like regular credit cards and then I consider after paying Clarnell that also credit cards Why were you spending that because you're trying to survive and your budget is not getting you enough money or tell me tell me what caused that It was once Okay.

Starting point is 01:21:20 Fast. If I didn't have the liquid cash, it would be the fastest way to get it and stay off a little bit, little by little. But it racked up. So I took out a personal loan to clear all of that. And so it took up a loan and didn't stop the spending. Yeah. So another great reason not to take the 401K loan,

Starting point is 01:21:47 because we've already learned that that method of kind of taking a loan to pay off debt doesn't work, right? Yeah. So George and I are going to suggest a way that's really going to cure your behavior because it's going to cause you to have to make real changes, really feel things, therefore kind of learning your lesson the old-fashioned way, which is I get a consequence and it doesn't feel good. I don't know. I probably shouldn't say this, but back on my day, we used to get spankings when we did things wrong. And it hurt. It hurt. It was like, oh my gosh. And you cry and you make sure that from now on, you're back home before the streetlights come on. And so that's kind of what this is going to do to you is you're going to feel like, man, I never want to do that. It's going to feel like discipline for you to do this. So George is right. Income is the main deal here. There's really two parts to this equation. It never changes, Victor. You need to cut back and you need to increase income. Simultaneously, both of those. things. How much is your rent? Uh, 1,000. Okay, great. I'm glad to hear that. So for you, it is like bare bones. It's just you, no, no wife, no kids. In my mind, if I'm you, I am going down to

Starting point is 01:23:01 nothing. All right, I'm cutting everything out. The memes used to say disappear for a while, and then you come back debt-free. That's you. You're disappearing. Okay. Okay. And then in the meantime, you're working, like Michael Jackson said, day and night. Okay? Yeah. What can you do? What are something? Tell me, list off a couple of ideas that you can do for work, so I know that you get it.

Starting point is 01:23:26 Well, I'm a very handyman, so I could definitely do some sidegakes with when it comes to, like, like, construction. Great. I really get my hands on, if I could get a job doing something, I could do it pretty much other than tech. I'm not a good at tech. Okay. Awesome. Can you advertise that? Can you get on Thumbtack?

Starting point is 01:23:49 Can you get on a Facebook group? Yeah, yeah. I could probably do that. Yeah, do that immediately. And I would start in my circle. If you go to a buddy's house and you realize something's wrong, say, oh, I'll do that. I'll charge you $50. Go to your parents' house.

Starting point is 01:24:06 The fence is broken and say, oh, I'll fix that at $75. Start marketing your talents and just start noticing stuff and just start telling folks. you'll fix it for this amount. Okay? In the meantime. And then get on one of those sites. What are the different? I'm thinking thumbtack, fiber.

Starting point is 01:24:25 Yeah, I've used thumbtack before. All those different apps where you can. Task rabbit. That's another one. Uh-huh. Where you can put your things up there. And here's the thing. You need to make a goal.

Starting point is 01:24:35 I want you to go on every dollar tonight. If you don't have it, Christian will pick it up and we'll give it to you. And I want you to plot out with what you're making now. do the part in there that's going to tell you how long it's going to take. So you'll fill out the onboarding there. And it's going to tell you at your current pace, it's going to take this long. And it's going to suggest a bunch of things for you to do, Victor, to find more. Sell stuff.

Starting point is 01:24:58 Get the side hustle. Pause all investing, which please tell me you will pause all investing down to zero. And so that means like no contributions to the 401. Yeah. Zero. Because what that's going to do is free up more money to go toward the debt. We need to focus on one thing right now and that is becoming debt-free. staying debt-free. And so all of this together is going to help you. We're going to do the

Starting point is 01:25:17 debt snowball, smallest the largest balances, attack the little one with everything you got, minimum payments on the rest. And here's the math on it. The napkin math says, if you can put a little over $2,000 a month towards your debts, you're debt free in less than two years. Okay. So that's the plan. I know that sounds like forever and you want the shortcut of just knocking it out now, but you're just trading one debt for another right now. And so we can't look to debt to be the solution anymore. You are the solution. You are the solution. You are future income, anything you have in savings above the thousand bucks, anything you can sell, all of your talents and skills put to good use. That's what's going to get you there, man.

Starting point is 01:25:51 We're rooting for you. Yeah, you can do this. Call us back and tell us when you're debt-free. Come back to the Ramsey Show in the Fair One's Credit Union Studio. George, are you ready to get to another call? I don't know how I could be more ready, truthfully. I'm pretty ready, and this person is in Austin, Texas. Sydney is on the line. Hey, hey, Sydney, what's up? Hi, thank you so much for taking my call. You bet. I just wanted to make sure that we're on the right track with the amount of money we're making, saving, investing, and still clear on like we have money to spend on the things that we want and not eagerly waiting for payday.

Starting point is 01:26:53 Oh, okay. Tell us more about your situation. So I just downloaded every dollar this month, 2026, getting on our budgeting, and I plugged in all of our bills and all the things that we want to spend money on. and there seems to be quite a bit left over, yet the past, especially the past six months, the past year really, we were just eagerly waiting for payday. Okay.

Starting point is 01:27:18 What do you? So in reality, your paycheck to paycheck, but on paper, in every dollar, it's like, hey, you should have $8,000. You know, you're like, where is this going? That means you're just not sticking to the numbers. Yeah, we're not sticking to the numbers. And we do put away a little bit in savings. We do have quite a bit in savings,

Starting point is 01:27:33 but it's not as much as we would hope, considering how much money we make. How do you make? So this information just became privy to me. My husband's been taking care of the finances up until now, but he is seeing that I cannot budget if I do not have any information. So he helped me out setting up the every dollar app, putting in his income, and I pay all of the bills,

Starting point is 01:27:54 and I do all that kind of thing with the shared money, but I make sure all the bills are paid. Okay. I think it's about 40K a month. $40,000 a month. So you're talking like half a million dollars take home a year? Yeah. Wow.

Starting point is 01:28:08 Some months is a little last. Some months is a little bit more. I was not expecting that with the way this call was set up. I'm not going to lie. Okay, so $40,000 a year. It's a lot. I think America's going, I wouldn't know how to spend $40,000 a month if you gave it to me.

Starting point is 01:28:23 Yeah, what's your mortgage payment? You can sign out to my every dollar and you can check how I spend it. You should DM it to Jay and I just for fun because we have a dark curiosity. We want to know how you would even do that. Listen, if you did, we would look at it. So tell us. Tell us the biggest, tell us a couple of the biggest line items on your budget. I'm guessing there's a house.

Starting point is 01:28:43 I'm guessing. Well, we try to put away about 12, okay, maybe like between 10 and 12 for taxes every month just to make sure that that's in an account. So when that happens, we're not like scrounging. Okay. So that's not actual income. So you guys are self-employed. Yeah, no, we put away.

Starting point is 01:29:00 Oh, yeah, that's before taxes. Oh, okay. So after taxes, it's closer to 28? I guess so. Okay. So in every dollar, you're going to list take home pay. Is that what you did, or did you list the gross amount? No. I listed the gross and then I put in as a category taxes. Got it. Okay. Okay. It may be helpful for your, you know, sake to do it the other way, but if you're taking, if the gross money shows up in the account, that's what you're budgeting off of. So that makes sense. Yeah, because the gross will show up at our account and then we take care of paying taxes quarterly. Okay. Fantastic. And then how much is your mortgage every month? So we have a rent is 3,300 a month.

Starting point is 01:29:39 Fine. Okay. Any debts? A little bit of credit cards for just the last couple of months being willing to pay it off, and we want to put a lot of money into savings, so we don't end up paying the credit card, not much, maybe $16,000 at most. And if we really wanted to, we could pay it off. We just want to make sure we're on the right track and really start budgeting.

Starting point is 01:29:57 I'm sorry, can I go back a second? Did I hear you say you rent? Yes, we rent. Why? How long have you been making this money? this money about a year for the year before that it was also good yeah we've been married four years so it's been it's been getting better every couple years okay but you've been six figures for upper six figures for quite a while we've always been six figures um upper six figures yeah for quite a bit so we're renting part right quick i'm just location location is very important to us um when we first moved here to Texas uh the company paying our rent. So we're like, great, pay our rent. And now they're not no longer, but we still want the location is very important. And we're looking for our house. We're looking.

Starting point is 01:30:43 Okay. So, sorry, that was just a squirrel I needed to chase. Okay. Um, continue, George. So, you've had a train of thought. Well, I'm, I'm confused why you guys are even going into credit card debt with this level of income, because you don't want to touch savings, but then you're going to pay 29% APR on the $16,000? That feels. Yeah, and we have quite a bit in savings. How much do you have in savings? How much do you have in the stock market? I'm not 100% sure. My husband has access to that account, but I think he put 30K into the market in the last couple months, and he's got to have about 60 or 70K in his high-yield savings account.

Starting point is 01:31:17 Okay. So I'm picking up on another issue here. I know you called about one thing, but part of the issue is you don't have the transparency you need to know what's actually going on. It sounds like you asked for that so you can make the budget. But you really do, Sidney, need to know all of these numbers so that you both. both can live in a state of reality with your money instead of guessing. It's hard to be in reality when you're guessing. If one hand doesn't know what the other's doing, you're going to always have

Starting point is 01:31:43 this problem and keep living in the cycle. You both have to be on the same page with full accountability and transparency. So that's step one. And then do you have any other debts outside of the credit card? Any car payments, student loans? We have leases, but yeah, we have leases, but we don't intend to own a car. What are they? What are the leases? So I drive a 20, 25, minivan, and that's 893 a month. It's important to my husband that I'm in a reliable vehicle every couple years, and she drives a range rover for just under 3K a month. Goodness gracious.

Starting point is 01:32:18 So let me go back to the minivan talk. So basically what you're saying is that 99% of the population is not in a reliable vehicle if they don't switch it out every three? No, no, I didn't say that. He does. Right. But my point is to call out the. ridiculousness of that statement.

Starting point is 01:32:37 And therefore, that means that you know it too. Plenty of people buy a car, even if you bought a brand new car and you just drove it until, you know, I don't know, for 10 years until you, whatever, that would be more reasonable than the statement that was said. You guys are dropping four grand a month to rent cars and you're prepaying all the depreciation. So that's part of the problem. I think that's a microcosm of a big. problem here, which is you guys, you make great money and you want to show it off, right?

Starting point is 01:33:10 There's some flaunting here. And the truth is, you could save up and buy these things outright. And it would still be okay. But we haven't actually, we don't have the discipline. We have the savings muscle there because he can shovel money away in other places. But you guys are totally okay taking on debt and payments because you can stomach it right now. Yeah, I wonder why. I wonder why there's the aversion because I agree 100% with George.

Starting point is 01:33:34 You guys make good money. If you want nice things, have that it. You don't have a ton of debt. But leasing is crazy. You could have literally bought both of these vehicles outright and nobody would have said a word to you. We would have been like, great. That's awesome.

Starting point is 01:33:48 And it would have been yours. And you wouldn't have been paying outright, outrageous interest and all these things on this. So what else is there? There's the two leased cars. Anything else? Nothing. Oh, the only other significant is I have a lady that can tell me with my kids

Starting point is 01:34:04 and with the cleaning. Sure. And when I put it into every dollar, I put in $2,000 a month, but between you and me, it's usually a little bit more because it's 5 o'clock and she just stays extra. And I pay her. Sure. Okay. So call it three.

Starting point is 01:34:16 So on the budget, here's what I think you need to do, Cindy. So when you make the first budget, it's a guess, right? It's, I think it's this. I think it's that. I don't know if you've actually gone back. And I'm not sure how long you've been on a budget. But if I were you tonight, I would go back and download some old bank statements and really, really see. Here's what I actually spent. Add up what you spent on food. Add up what you spent on,

Starting point is 01:34:40 you know, DoorDash, add up what you spent on housekeeping, add up, add up those actual numbers and plug them in every dollar. Then you're going to have what's called an accurate budget of what you spend. Then you can decide what makes sense to cut back on. And that's honestly all you need to do is cut back on frivolous spending. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey trusted pros. Whether you're looking for car, home, or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance.

Starting point is 01:35:53 You're listening to The Ramsey Show. George, I want to come back real quick. and talk about the last call that we got because it dawned on me, you know, they were renting their entire lifestyle. They were renting their home, renting their cars, and it's very hard to build wealth if you don't at some point lock in and make yourself an owner of the things that are in your life. We talk all the time about renting is okay for a certain period of time. Obviously, you rent and it buys you time to be able to buy. That's, it's not throwing money. down the drain or anything like that. But just be careful. Things like leases are the most expensive way to operate a vehicle. It is like you said, George, you are renting a car. And if you're

Starting point is 01:36:41 out here trying to do anything that we teach, if you have a lease, that needs to be the first thing that you look at. I mean... Well, and the other problem is it's really hard to get out of these things. Very hard. I mean, you got to get to buy it. You have to have the entire amount in full to get out of a lease. Yes. You can't just like put extra on it and get out. That's the awful part. And good luck trying to get someone to take over your lease.

Starting point is 01:37:04 You've got to find someone who's real boneheaded to do that. So it really is one of the biggest traps people fall for. And who falls for it the most? High earners. High earners. Because they want to look good. Yeah. And they end up paying ridiculous.

Starting point is 01:37:16 Obviously leases don't have interest the way we think of it. It's just baked into your payment. Yeah. He's out of your paying $3,000 a month. Yes. To look good driving the range. rover. So here's the key. Instead of looking wealthy, you want to actually be wealthy. And instead of just looking like you have nice things, actually have nice things by owning it outright, building

Starting point is 01:37:37 equity towards owning the home, paying cash for that car if you can actually afford it. But instead, we want to shortcut our way and just, well, we can have it right now. It's kind of like a petulant toddler who's just like, I can't wait. I got to have it now or else I'm going to have it on my tantrum. Yeah. I work really hard. I deserve it. Those are the three. two most dangerous words in the English I deserve. I deserve. Yes. I write. I have a whole chapter on that and what no one tells

Starting point is 01:38:04 you about money. So the point, the moral of the story guys, is exactly what George said. Don't be fake rich. Be real rich. Especially when you have real money to be real rich. All right, let's go to Kyle in Chicago, Illinois. What up, Kyle? Hi. Thanks for having me on the show. My question today is

Starting point is 01:38:22 should I cash out my whole life policy? Short answer, yes. Let's talk about it, though. Tell us more about your situation. I started it back December 2014. Oh, man. The total value to, yeah. You've been in this a minute. Who hated you enough to sell you that policy? Was it an old college buddy? No, it was my wife's cousin. Oh, even worse. That's blood, man. That's dark stuff.

Starting point is 01:38:51 Oh, no. On top of that, a year later, I saw him at Christmas, and he said, yeah, I quit that company because they were making me sell things I didn't believe in. I hate to ask, but how much money have you poured into this thing since 2014 and how much is cash value at this point? Okay. As of now, $69,000 I've paid in. Oh, boy. And what's your cash value? $59,000.

Starting point is 01:39:16 Oh! Brutal. Okay. So, you know you need to surround. under the policy. So what's the question behind the question? So based off the chart that they send me, I'm on year

Starting point is 01:39:29 12. Based off the chart, it looks like on year 15 would be my break-even point. Wow. So you want to keep doing this? In many more years, I could well, that's why I called in and ask you guys, but... What's the death

Starting point is 01:39:47 benefit? Half a million. Oh my gosh. Goodness gracious. You could have got that with term life for like pennies on the dollar. Yeah, it wasn't until I started listening to Dave Ransey that I knew I screwed up. Yeah. Well, it's okay. We're not here to shame you. Like tons of people fall for this stuff. Do you want to shout out the name of the company that he left? I'd rather not. Okay. Just making sure. Just want to let you, you know, vent if you want to vent. All right. So I would surrender the policy. What you're experiencing right now is sunk cost fallacy. You're like, well, I already put this much in. If I stick with it just a little bit longer, three more years. of payments, I can break even, I would take the loss and go, hey, that sucked. It was a hard lesson to learn. The good news is you sound like a young, upstanding guy with a great income,

Starting point is 01:40:31 so you're still going to be able to build wealth. So chalk it up to a hard lesson that was learned here. Okay. What do you make? Oh, go ahead. So my wife and I make $160,000 a year. Fantastic. What do you make personally? I make 80. Okay. Great. So you need a policy worth 10 to 12 times your annual income. So you're already low or the death benefit, even with this super expensive crappy policy. So I would, number one, get term life insurance in place first before you surrender the whole life policy. So there's no lapse in life insurance. And so keep going? The next part was about two years ago, I called and asked about cashing out the policy. And they offered a cash value plus a term.

Starting point is 01:41:22 life, like they would take the difference of what a term life would be. I'm not doing any more business with this company. Okay. They can't be trusted to offer you any products. It's been 20 years of pain. So I would contact Zander. That's who I have my term life insurance policy through. You can call them at 800356, 4282 or jump on zander.com and get a quote.

Starting point is 01:41:43 You can actually do a lot of these online. Like for you, you need a, let's say, a million dollar policy, 10 to 12 times your annual income. And you can do that with no medical exam, do it completely online, and you're in good shape. You sound healthy. Well, thank you. And how old are you? 36 years old. Okay. Same age as me. So likely your policy isn't going to be that much for a million dollar policy. It's going to be, you're going to be like, wow, what a discount I just got for paying this whole life premium for 11 years. And so it is worth it. You're going to get double the coverage for a fraction of the price you were paying. And you can turn around and invest that difference

Starting point is 01:42:18 on your own an actual good mutual funds. Likely one to three percent is what people see the return on their whole life policy. One to three, you could literally do better in a high yield savings account. That's truly what we're saying. Yeah.

Starting point is 01:42:36 So step one, turn life, step two, surrender, and you'll get some cash value out of it. What will you get at the end of the day? Have you looked into it? I'd get $60,000 if I cashed out today. I'd take that. Yeah. Do you have any debt?

Starting point is 01:42:50 Do you have any savings? We have a mortgage-only debt, and it's $60,000 is what we owe to us. Oh, I love this. This is more than coincidence, my friend. That feels great. This is a divine appointment. So you're telling me, by like the end of next week, you could be completely debt-free, house and everything, and not have a whole-life policy.

Starting point is 01:43:12 Yeah, and I guess the next question is my interest rate is only 10. 2.1% Who cares? Dude, what's your mortgage payment? Yes, pay off the house. $1,200 a month. Okay.

Starting point is 01:43:27 You want to do some fun math? Do you have any money in retirement right now? Yeah, me and my wife have $270,000 in retirement savings, and I'll have a pension when I retire. That's so awesome, Kyle. Fantastic. If you did nothing, if you don't invest anything except that mortgage payment, you would have $5.3 million. between the two of you at 62.

Starting point is 01:43:48 If you just invest the $1,200, $200, you don't do anything else. Oh, I got that. And so you're already doing more than that. So I'm not worried about, well, it's 2%. Who cares at this point? Dude, you are on your way to building serious wealth, and you can't put the psychological piece into a spreadsheet. And it's so hard for me to explain because I'm the guy who paid off his low-interest

Starting point is 01:44:06 mortgage, and everyone's like, why would you do that? And now it's becoming a trend. Everyone's like, well, I paid it off because I wanted the peace of mind. And if something happens, you don't have to worry about it. And if you lose income, you don't have to think about it. you just have more flexibility and options. Plus, if your house were paid off, if it were paid off, you would not be calling us saying, hey, I want to borrow $60,000 against my home so I can invest.

Starting point is 01:44:28 You wouldn't do that, would you? No. Right. So I don't think the spread is worth it on keeping the mortgage. And I would just try to stomach the sunk cost fallacy and go, man, I got screwed by someone that I trusted by a company that essentially felt like a scam. and you learned your lesson. 36 is actually early.

Starting point is 01:44:49 A lot of people... We've all done crap like this, Kyle, just so you know. You got a lot of life ahead of you. You guys are going to build outstanding levels of wealth. I have no fear. So call up Zander, get on the website, get that term life policy in place. For anyone that has anyone depending on them, you need term life. 10 to 12 times your annual income.

Starting point is 01:45:07 A 15 to 20 year term is what makes sense for most people. It's so affordable knowing that your family is covered. Yeah, and just remember term life insurance. guys, it's not a baby step. It's not something you do once you hit some point. You do it immediately. I don't care if you're in baby step one. If folks are depending on your income, you need life insurance, and you need it today. How many of you are ready for a fresh start with money this year? Maybe you want to pay off debt or start saving for retirement. And those are great goals. But you're also probably thinking, well, sure, Rachel, but with what money my budget is so tight as it is? Listen, I hear you.

Starting point is 01:46:02 But you can do more with your money this year. And our every dollar budget app helps you find margin to make it happen. This is such a game changer. Every dollar digs into your money situation just like we do on the show. Then it finds extra money you could put towards your goals every month. And the average person is finding $3,015 in just 15 minutes. Think about what that could mean for your family. Think about how much more peace you would have.

Starting point is 01:46:27 Guys, you can make this an amazing year with money. Go download every dollar and start for free today. Thanks for listening to the Ramsey show. Back to the phone lines, we go, Philip in Raleigh, North Carolina. Hi, Philip. Hey, guys. How are y'all? Thank you for taking my call, and thank you to this call screen for doing the same thing.

Starting point is 01:47:02 Well, you bet. Christian, look at this. Shout out to Christian. They don't get enough love. They're really doing the work on the front lines to protect us. Yes, you do. You do lots of work, and we're grateful to everybody in the booth. hearts. How can we help, Phillip?

Starting point is 01:47:20 Well, guys, this is a hard question because there's probably some emotion involved in it. So my wife and I are on our, well, I'm on my second, Mary, she's on her third. And for 10 years, we've been living really happy, and we're happy now, and that's great. We took on, just before COVID, we bought a farmhouse. We paid $71,000. for it. We put 40 in it. We remodeled the whole thing. We put it on the market a year later,

Starting point is 01:47:51 and the realtor said, no, you need to list it for 315. Okay, so we walked away with 175K and profit, which was amazing. We weren't expecting it. We were expecting maybe 50. So the market's

Starting point is 01:48:07 been great to us. We've actually flipped one other homes since then, and the one we've been for four years. We're thinking about, selling it. And the houses should sell for around 315. We've got a $70,000 Helock, a $4,000 personal line of credit, and a truck that I bought recently for $29,000 is what I owe on.

Starting point is 01:48:33 The new house is on a golf course in a neighborhood that I always want to live in, and it's beautiful. It's a French provincial home. Life loves to decorate. I love to give her a canvas to decorate on. And the house is listed at 724. We're looking to make an offer on this house that won't exceed 600, and we believe that around 570 is where we would be realistically. 570 as far as a mortgage? Yes, sir.

Starting point is 01:49:09 Okay. So how much will you, do you think you'll get from the proceeds of this house? This one, the realtor, he's saying around $315. Okay. Is it paid for? Oh, yeah. We owe a $70,000 He lot. Okay, so that's all you owe. You don't have a traditional mortgage on it?

Starting point is 01:49:31 Correct. Yeah, we paid cash for it, and then we fixed it up with more cash, but we've had to fix the basement, put it in the heat in the air, and then we actually put in some hardwood floors. Okay. Okay. So after fees, will you walk away with like $300,000, you think? $315. You know, I figured, I figured if we sold for $315, we paid off the fee lock, the personal lot of credit in the truck. We have around $1.90 left over.

Starting point is 01:50:00 Okay. And that'll be your down payment for the next house. That's fees and everything, yes. And let's say you get this new house. You think you could get it for $600? I believe that you think they're going to 24? Yeah, that's very low ball. Yeah, that's very low. Well, so it's a 4,200 square foot house that was built in the 60s and it's not been remodeled at all.

Starting point is 01:50:25 Has it been on the market a long time? It's been on the market almost four months. And, you know, we're an hour north of Raleigh, so it's not the Raleigh market. the median price per square foot is around 150 in Henderson. And I told him an acre of land, so it's a pretty average. I think the median pretty well applies. Okay.

Starting point is 01:50:54 So the short of it is, let's say you got it for $600, and you were able to put $200 down. So it leaves you with a $400,000 mortgage. And what's your monthly take-home pay as a household after tax but before other deductions? Um, let's see. So it's around 7,600 take home. Um, but I also have a tax business, uh, that I've been running since 2007. I do around 300 tax returns a year. So, you know, we're probably net around 30,000 from that. And then I usually get about a $10,000 bonus every year as well. Okay. So have you done the math on what the mortgage payment would be every month if you got a $10,000? a $400,000 mortgage with today's rates? It's around the 25% mark. Okay. Is that a 30 year, though, I'm guessing? Yeah, that's a 30 year. That's not the 15 years it talks about. Okay. Well, our parameter is 15-year mortgage, no more than a quarter of your take-home pay,

Starting point is 01:51:56 and you guys, you're close. You're on the line. I think you could get there with a little bit of patience and saving. You have a great income, and so it might just be a little longer, and it's hard when you got your site set on a very specific house, you're like, this has to be it. It kind of gets you starry-eyed and causes you to make some bad decisions. But I like the overall plan of selling the house, paying off all of your debt, having savings left over plus the down payment. How much other savings do you have? What do you have? What other cash do you have? So we have our emergency fund. How much is that?

Starting point is 01:52:27 It's around $2,000. And then I've got a 401k at work, which can't touch that, you know. Did you say your emergency fund is $2,000? Yes, ma'am. Okay. And that's the only non-retirement money you have? Correct. Yes. Okay. Yeah.

Starting point is 01:52:52 Okay. Yeah, I got to say, I love this plan, but the only thing is I agree with George, I just don't think you're quite ready to make this move. You're talking about making a major move. You've got this debt. The debt will be cleared off. there's no extra money laying around anywhere. For this to work, everything has to fall perfectly.

Starting point is 01:53:15 You have to get the house for the exact right amount. And what I can tell you is you're emotionally invested. And so if you don't get it for 600, I think you're going to make the offer anyway. And I think I'm a little worried about that. I think that if they said 680, you'd take it. Or if they said 700, you'd take it. You see what I'm saying? And with no money saved.

Starting point is 01:53:38 Yeah, I would want to. Well, your wife has already pre-decorated this house. That's the problem. And so that's what I'm worried about. And on a 15-year, you're looking at more like a $4,000 mortgage. And so that's the reality here is that it's over half of your take-home pay. And now there's pressure. Now you have to have this side business work out permanently.

Starting point is 01:53:57 And so I just don't want this house to go from blessing to burden real quick when you bid off a little more than you could chew. And when you only have 2,000 saved, because then your next order of business really quick would be saving up three to six months expenses because you don't have any saved. So what if we cleaned up the debt with future income, then we got a fully funded emergency fund, then we could sell the house and use all that equity instead of throwing it towards the debt because you've already cleaned it up.

Starting point is 01:54:22 Absolutely. Now that looks more like, oh, this is going to be, we're in this house for two more years. That's the tough reality that the news you've got to break to your wife. Well, and we're both on the same page of this. We could go either way. Yes, she has a decade. But you know what? The same decorations are in the house we're in right now.

Starting point is 01:54:41 That's true. That's true. We're realistic about it. And to be honest, we've been back and forth and back and forth. I've basically done a home inspection on it and everything else. I mean, I sent an email to the realtors saying that I think it's $110 square foot house with all the repairs that need to be made. Because I've got a $40,000 paid driveway that needs to be fixed.

Starting point is 01:55:05 Yeah. Yeah. Yeah, you're telling me what I thought you would tell me and what I kind of, I guess, in my heart felt anyway. Yeah. Well, you guys are doing some good things. We moved backwards by taking on all this debt. And so if you didn't have this debt, you could maybe stomach all this.

Starting point is 01:55:23 But right now we got a mess to clean up. We need some savings in the bank. That's how you step into home ownership from a place of strength. It reminds me of a saying, this is an Arabic saying that I heard my mom say. How's it go? El Jemel Bil-Irish, which translates to the camel costs one cent and I don't have one cent, which means I don't care how good of a deal. But, Jade, it's a great deal.

Starting point is 01:55:45 It's a once-and-a-lifetime opportunity, and we don't have the money to make this make sense. I just love that it's a camel. It's the perfect saying for you. I know my last name is camel. That's just how the old Arabic saying goes. A lot of camels in the Middle East. Say it again. Yes, I love it.

Starting point is 01:56:02 That's great. Sorry. You ain't got a penny. You can't buy it. I don't care if it's borderline free. Oh, man. You can't afford it. That's a hard lesson to learn.

Starting point is 01:56:10 That is a hard lesson. But those Middle Eastern folk, they know what they're talking about. They're frugal. When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment. go to ramsysolutions.com slash start, answer some questions, and we'll show you what steps to take next.

Starting point is 01:56:59 Don't stay stuck. Take control of your money starting today. Go with ramsysolutions.com slash start. Thanks for hanging out with this. The scripture and quote of the day, 1 Corinthians 924. Do you not know that in a race, all runners run, but only one gets the prize. Run in such a way to get the prize. Amelia Earhart said, decide whether or not, the goal is worth the risks involved. If it is, stop worrying. Man, boy, that's a, that's a dark quote from Amelia. Oh, I felt like it was on point because I'm thinking about the baby steps. I'm like, when we tell people the baby steps, the number one thing they're trying to assess is, is it going to be worth it? Like, is it going to be worth my sacrifice,

Starting point is 01:57:54 my time, my effort, my struggle? And if you've already decided that it is going to be worth, just stop worrying. Just stop. Otherwise, you're just spinning your wheel. But I guess Emilia Earhart, she's talking about. I mean, you know, she's willing to fall out the sky. Yeah. Really? Wow. All right.

Starting point is 01:58:13 John in Las Vegas, Nevada. Get us back on track, John. What's going on? Hi. My daughter's in her sophomore year of college. And a couple years back, we made a deal that she did well in school. We'd pay for her housing expenses and ability to go to college if she got a scholarship. she can't throw on her in and we've been doing that however she keeps making decisions that

Starting point is 01:58:38 kind of go against what we're advising her to do and my question is is I feel like I'm we might be hurting her more than we're helping her by trying to send her to college and not holding her to to an accountability standpoint of being you know growing up what types of things are is she doing that's um so not what you want so a while back I made a well known like tattoos were not a thing that we approved. And it was one of those deals where we said, listen, you know, if you want to get tattoo that's on you, but not while, you know, we're paying for your things

Starting point is 01:59:13 because then I feel like I'm subsidizing it. And so, you know, she's come home with numerous tattoos. And then the last one she came home with, she called me ahead of time knowing that I'd be upset about it. But when, and I was glad that she was honest with me. However, she knows that we don't approve of that. right now at her age. How old is she?

Starting point is 01:59:36 The fact that, you know, she's just about to turn 20. So, you know, it's her body. She can do whatever she wants. However, I just don't feel comfortable with her getting tattoos at that young of an age. You know, that's kind of a permanent thing for a young person. You said to opposing things in one sentence. You said, it's her body. She can do whatever she wants.

Starting point is 01:59:59 And then you turned around and said, but actually she can't. So I think you have to figure out which one of it it is for her age. And then the other question I have just practically, is she using the money that you're giving her for tattoos? Well, so that's the part. So we pay for her housing and then we also pay for her tuition. Okay. And so she made a decision to do a trip last year and didn't plan.

Starting point is 02:00:31 for it correctly and she wound up spending it like she needed help on that trip so part of that is we lowered her her monthly expenses that she gets and so she's covering that for her job and then you know she uh she that and we're basically let that be the payment so we're paying giving her less for housing and she covers the difference does she's in an apartment an apartment or campus housing it's a it's a it's an apartment slash housing uh campus housing it's kind of a blend So it was like $1,000 a month. And now we've downed it down to $800 so she can pay back over a year the amount of money that we gave her to live while she was doing her trip to Italy. And so, you know, we're proud of her because she paid for the trip for Italy.

Starting point is 02:01:18 However, you know, one of the deals with doing that was, listen, we're not paying, we're not financing that. How much over did she go on that trip to Italy? Like how much did you need to bail her? out? Three grand. Ooh, yeah, that's a lot. Yeah, and we were on top of it. We were on a trip in Europe, so we spent a whole bunch of money for our,

Starting point is 02:01:39 you know, our trip that we were super excited about doing for us, and then we're having to come out of pocket, so, like, you know, kind of put us in a bad position. How are you guys covering her tuition and housing? Is this from a college savings account, or just cash flow or normal savings? No, that would have been, that would have been a lot smarter when I was

Starting point is 02:01:56 younger, but, you know, we're doing very well financially. Between my wife and I, we make about 220,000 a year. Awesome. So you just cashed it. How clear was it that tattoos equals were cutting you off? Or was this just a separate preference? Like, hey, I don't want you getting tattoos. It was separate. But when she got in the argument with me about it, I said, listen, we're paying for you to go to school. And all that is money that you're not having to spend to go to school, right? So we're trying to set her up as much as possible. And my view on it is I don't believe in making permanent, you know, markings on your body until you're, until you're fiscally responsible for yourself. And then if

Starting point is 02:02:37 you want to do that, you can do that. But also maybe be a little bit older so you can make wise choices instead of a, you know, 19, 20 year old, you know, putting things in their body that don't necessarily make that. Yeah, this is a 20-year-old decision. And, you know, it is a preference. There's no moral failure here. I personally, if I'm dad, I get you being upset. I get the disrespect, but I would not cut off her college funding. If you want to tie it to something, I would tie it to grades, attendance, legal behavior, you got to finish in four years, all of that. But this is just a separate issue, and now we're trying to weaponize her college funding

Starting point is 02:03:10 to get her to stop. What you can say is, hey, any future tattoos needs to come out of your money from your job. We're going to send this money directly to the landlord, directly to the school. We're not just going to fund it in your bank account. Yeah, so we haven't been doing that. we've been purposely having her pay everything out of her account. We fund it. And then she makes the payments to those things.

Starting point is 02:03:32 However, like I said, she just quit her job without having another one lined up. And she doesn't seem to be in a hurry to get another job. And she's having her boyfriend pay for everything. And we're just going like, hey, that's not a wise, that's not wise decision making. You don't, you don't do things like that without having other things lined up, you know. Yeah. So we're just concerned that she's not, she's not. making, the whole thing we're doing is trying to develop her to learn how to handle money and

Starting point is 02:04:00 make good decisions. And we feel like often we're really bankrolling her bad decisions, and that's what we're worried about. I kind of hear two things at play. I'm going to caveat this, John, by saying, my kid, I almost wish Dave was on, because my kids are young, they're five and seven. I've not been in your shoes. So I'm literally just listening. And what I'm doing is thinking back to when I was in college. So that's where this is based from, just. just so you know. I'm kind of hearing two things go on. I'm kind of hearing a concern about how she's handling her money, but I'm also kind of hearing a power struggle of she's getting older. She's making choices. You don't agree with them, which you have the right to not agree with them.

Starting point is 02:04:43 But there's also this part of she's just going to make choices. And some of them you're just going to have to let her make, I think. Let's deal with the money part. Money part, I might be inclined to say, you know what, you had the luxury of having this kind of off-campus hybrid, I think that we're not going to do that because you haven't been able to kind of hold up your end of the bargain. So you can do the normal campus housing. And if you get a job, we're open to you doing the hybrid thing where you have the apartment, but you'll have to pay for it. You could totally do that. Plenty of kids go to school and they live in on-campus housing. And they don't get the fluff. You know what I'm saying? So you could totally do that.

Starting point is 02:05:24 I would probably distance it from this whole tattoo thing. So it did not seem like a retaliatory response to the tattoos because I actually do think that that's very separate. But if you do feel like, hey, we're bankrolling her to the extent to which she's not doing a part-time job or some of the things that we talked about her doing from the beginning, I think that that's a fair thing. Now, the other side of it, let's talk about kind of like the tattoos, personal choices with the boyfriend. that is another area that I'll be honest I think it could be one I don't know this is just me speaking from being a 18 year old girl with a dad who was trying to help me with I feel like if you get too smothering it could all almost have the opposite effect so I yeah absolutely do you know what I mean so it's almost like you've probably experienced that already is like the more you lean in the more she leans away and now she wants to rebel as a as a because she doesn't know how to even handle that. And it feels like you're controlling her. She's a grown woman now.

Starting point is 02:06:27 And so they are two separate issues. And if you want to not feel like you're enabling, you can fund the direct thing you're trying to fund and know more. And now it's on her. And if boyfriend covers the bills, that's a problem he's got to deal with. And when she needs to get a job because she can't buy the things she wants to buy, she might go into debt.

Starting point is 02:06:43 And you hate that because you're like, we said you're not going to go into debt. But at the end of the day, putting her in crippling student loan debt and having her hate you forever, I don't think is the right next step. Best of luck, man. That's a tough one. It is a tough one. Hey, thanks for hanging out with us on the Ramsey Show. If you're wondering where you are on the baby steps,

Starting point is 02:06:59 make sure to go to ramsysolutions.com to find out. And as always, there's only one way to ultimate financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

The Ramsey Show - Clarity With Money Brings Peace At Every Stage Of Life

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