The Ramsey Show - Cleaning Up A 20 Year Financial Mess Takes Time

Episode Date: March 14, 2024

💵 Sign-up for EveryDollar today - The simplest way to budget for your life! Dave Ramsey & Dr. John Delony answer your questions and discuss: "What should I do financially after paying off debt?" "Should I sell my rental property if I'll pay $220,000 in capitol gains?" "How can I stop living paycheck to paycheck?" How to move past the shame of poor financial decisions "My pregnant ex is moving out of state - should I move too?" Why you shouldn't share ownership of a house with your kids just because they can't afford to buy one the one they want instead of what they need Dave Ramsey gives an update on the current state of the real estate market How to save up to afford a surgery while in Baby Step 2 Support Our Sponsors: BetterHelp Angel Studios Zander Insurance Churchill Mortgage Next Steps 📞 Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET or click here! 🏦 Take Your 3-Minute Money Assessment - Get a personalized money plan! 📄 Need help with your taxes? See who we trust. ☂️ Protect yourself with the right coverage—take our coverage quiz! 💼 Find the career you were born to do! Listen to more from Ramsey Network 🎙️ The Ramsey Show   🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💡 The Rachel Cruze Show 💸 The Ramsey Show Highlights 💰 George Kamel 💼 The Ken Coleman Show 📈 EntreLeadership Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Dr. John Deloney, Ramsey Personality, is my co-host today. Thank you for joining us, America. We're so glad you are here. Open phones at 888-825-5225. Brennan is with us in Tampa.

Hi, Brennan. How are you? Good, Dave. How are you doing? Better than I deserve. What's up? Hey, long-time listener, and I appreciate you taking my phone call. I did not expect to actually have you answer.

But, yeah, if you don't mind helping me, I've got some questions for you. We're here for you, brother. What's up? Okay, so I have a house that I still own in Colorado. I'm currently living in Florida. I purchased, I guess, the second house in Florida. And over the past two years, we've been living in Florida and grown to love the Colorado, and we like to go back there for the summers since I can work really from anywhere. My wife stays home with our three boys, and to further complicate things, I'm selling the current house we bought two years ago in Florida to upgrade to a larger home, and I need to know what best steps I need to take or get your opinion on what I should do moving forward with selling these homes

and how you would build up. Oh, you still have a house in Colorado? Yes, sir. Oh, okay. All right. Because you might go back there for a couple months of summer? Correct. Yeah. Okay. All right. Because you might go back there for a couple months of summer. Correct. Yeah. Okay. And do you have mortgages on all this? I do. On both of them? On both. Yes. Okay. And what do you guys make? What do you make?

Your wife stays home with the boys. I make 210 a year. Way to go, man. You're killing it. How old are you? 36. Okay. The house in Colorado is the old girlfriend you cut loose because you got married. Okay. Does that make sense? It does. She's pretty, Dave.

She's pretty. He's still got one toe in the old pond. Right? And that's what's going on here, because there's nothing about this that makes financial sense. Absolutely not. No, I mean, you could rent the freaking top of the Ritz for what you're paying for that house for a couple months a year. Right. Yeah.

So there's nothing about it that makes financial sense. It's just cut it loose, man. Cut it loose. It's the last thing that says I'm living in Florida. And use that money to pay cash for the other house. It'll pay off the other house, won't it? Absolutely. Yeah, man. What are you doing, man?

It's almost like I've done this before. Yeah, when you get married, you've got to unfollow the old girlfriend. You have to burn all the old phone numbers. That's it. So, yeah, or whatever you do in the digital world. But, yeah, anyway. Yeah, did I miss something there? No.

I also wonder how easy it is for the family to say, oh, no, no, no, we still got a place. We still got a place. And I don't know, everybody's just kind of playing. I don't live there anymore. And here's the interesting, listen to this. I currently live in Florida. Right.

That's how he opened, right? But then later on, we've grown to love this and are going to make it our home. So the decision is now made, but it was like, whew, they're both there, yeah. He still loves his old girlfriend, Dave. Well, Colorado's awesome. It is awesome. Nothing wrong with Colorado. And his family's back there, so that's reasonable.

Yeah, but it's causing you to make a bad financial decision that's why we're poking fun at you so at the decision not at you and in in real time this is the case then he's going to save some money and then get a really nice airbnb for the two months he's there yeah you can get it and and probably actually something more vacation-y than the old residential suburb house he's got back there. And somebody's going to come clean up. Somebody's going to take care of the place. Get an A-frame in the mountain, right?

There you go. That kind of stuff. Because I'm guessing that house isn't that. I might be wrong. So, yeah, I'm just going to have a great life there in Florida and plan my visits back home to see the family and do those in an enjoyable way. And work there a couple of weeks a year.

I've got some good friends that are in their 40s. They do that with Jackson Hole. When they first got married, they spent two years in Jackson Hole. And then they live here now. But they go back a lot for the summer. They just love it. And the summers are particularly beautiful. So, yeah, that's the same kind of thing you can do that and but you just you don't need to own

something to do that the only way you would own something there's if everything else is paid off and you have the money for a second home and it's a toy so it'd be like a ski home or something in colorado that kind of thing a mountain home right and or it's like a lake house you know a beach house it's those kinds it's fall in that category but not the not that i'm still hanging on to where i used to live home and i'm mortgaging in the meantime in the meantime yeah jason's in greenville hi jason what's up jason how you doing, Dave? Sorry. How can we help?

Yeah, just my wife and I are both teachers, and we are three years away from state retirement here in South Carolina. And so we'll be 48 when we can retire from teaching with a pension. I'm just wondering if I should. What are you going to do with the rest of your life? Whatever makes me feel good, I guess, or makes me happy. Bad plan. That's a terrible plan, dude.

Don't do that. Hedonism leads to heart attacks. I mean, we have nothing. I mean, we have side jobs now. I'm a chef for a boys' and girls' camp in the summer. That's not what I'm talking about. We really, I mean, we're foster parents. Jason, neither one of these are even close, and you know it. So you're 48 freaking years old.

You have another 50 years on the planet, potentially. Chefing at the summer camp ain't going to cut it for half a century, okay? Not going to work. So what are you going to do with your life? If you can answer that question, then sure. That's going to be your encore career after teaching. It doesn't have to be a 40-hour-a-week grind. It might be you open a business.

It might be you do this or that. But it's something you put your hand to the plow yeah i mean um we are i mean that's it's it is cooking um that's my passion oh you want to be you want to be a chef you want to open a full-time chef thing you're going to be a catering or in-home private chef or something like that. Is that right? Hello? This guy's got phone problems. Whatever you do, don't go in the phone business. You're 0 for 2 on the phone, man. Hey, this idea, and it's a weird cancer that's somehow grown out of the American dream of,

I want to work real hard so I can do nothing. That is a recipe for disaster. Relationally, physically, emotionally, spiritually. Spiritually. It'll collapse you. You will not. There's no great joy except in serving. Fishing and golf, you'll just get fat.

Don't do it. This is The Ramsey Show. This show is sponsored by BetterHelp. This is the season for Halloween. It's October. We're wearing costumes and we're wearing masks. If you haven't started planning your costume yet, get on it. And while you're thinking about it, I want you to be honest.

A lot of us hide ourselves. We hide our true selves behind costumes and masks all the time. We do this at work. We do this around our friends. We do this around our families. We even do this when we look at ourselves in the mirror. I know because I've been there multiple times in my life, and it's the worst. If you feel like you're stuck hiding behind

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take off the mask with BetterHelp. Visit betterhelp.com slash D'Loni to get 10% off your first month. That's betterhelp.com slash D'Loni. Dr. John D'Loni, Ramsey personality, is my co-host. Bakersfield, California. David is with us. Hi, Dave. How are you? I'm doing great. How are you guys? Better than I deserve. What's up? My question is, my wife and I are in the process of building a home and, uh, have a construction loan and I'm kind of newer to listening to your show. So now I'm trying to, um, do things probably in reverse order because things are already underway, but I have a four 57 account from a prior employer that I, it's about a hundred thousand that I'm able to cash out. And I'm wondering if

it would be a good idea to cash that out, order to try to shoot for getting it as a 15-year mortgage when that time comes at the end of the construction loan. How old are you? 33. Are you not going to be subject to penalties on that? Because I changed employers so I'm maxing out a four 57 with a new employer now. And I still have a pension. Um, it's just sitting there not getting anything added to it, but, uh, that wasn't my question. I'm pretty sure you have a 10% penalty plus your tax rate on that. So it'll just be the tax rate from the research I've, um, looked into and talking to the investment, um, company that I was with. Okay.

It has nothing to do with you reinvesting into the other. It's possible that you were – the 457s take several different forms, so it's possible what you're saying is true but unlikely. So I'm questioning that. You're definitely going to get your taxes on it yeah yeah yeah and so what's your household income um it's expected to be about 450 before taxes this year okay and so you're going to get hit with 38 of this you're going to lose almost 40 cents on the dollar. How much is in the 457?

It's about 100,000. It keeps fluctuating. So you're going to send the government about 40 and put 60 on your mortgage if you do this without a penalty. Yeah, that's a hard hit. Yeah. It's just your tax rate. You make a lot of money, and you're going to get taxed. I don't know what California is going to do to you,

but that's what federal is going to do to you. You might have to add California into that too. Because at $450,000, didn't they just pass like a 15% we hate the rich tax there? Yeah, I'm hoping that all the things we're trying to do to reduce the income, get it below. Below what? I mean, you make $450,000.

Well, you don't have enough deductions to get it down to $50,000. I mean, that's the consideration. I don't know what you're going to have from California. I've just got a couple of friends that left there after this last piece of legislation. Cause they said no more, no more, you're not taking my stuff no more. So they're out, um, and their income earners higher than you. But you know, their whole reason was that the thing was a graduated thing and it was aimed only at wealthy people and the wealthy people aren't going to stay. So that's kind of interesting. They're not going to get it, but it's what always

happens with this. But the, uh, um, anyway, all that to say, if you're going to do it, you need to know exactly what that picture is. And it's not internet advice that you need. It's tax advice. And then you say, okay, if it's 40% federal or 38, okay, which I'm pretty sure that's right. And there's no 10%, which is fine in your situation. And then in addition to that, California is going to hit you for X. Let's call that 10. Well, now we're at almost 50%. So your $100,000 is going to be $50,000. Yeah, that's less than I expected.

Yeah, if that's the case, you may not want to do this i'm thinking thinking there may be another angle on this uh that you want to do the good news is you make a lot of money and you got a lot of other ways to get yourself out of debt and get yourself on a stronger foundation without having to um get destroyed by a state and federal government system. So I don't know. Look at it and find out. If you don't have a good tax person, you can go to RamseySolutions.com and click on the endorsed local providers. That's what we call them, ELPs for taxes.

They're Ramsey trusted. We probably got 1,000 of them or something around the nation that are all top notch. Sit down with one of those people, run the numbers out so that you're making the decision what however you make it with full disclosure to your own brain right um and because i got a feeling you're smart guy usually dumb people don't make 450 okay so i think you'll be able to figure out oh i'm not doing that or oh yeah that's cool i'm still gonna do it okay. And you can move that and get comfortable with it. But what you don't want to do is just say, I Googled it. And then tax time comes and I'm screwed because I didn't really understand.

You don't want to do that. There's too much money involved here. And I almost think the meta question is, Dave, I hate even using that word, but the bigger question is when you start to build a house on land, it's real easy to get excited and do not at the front end count the cost. And those things can get out from under you really quick. And all of a sudden you find yourself cashing out retirement plan. You find yourself trying to find money. That wasn't what he said.

Right. And I'm going, I honestly, I didn't hear anything in his story that sounded that way. I mean, I would have jumped on it, but, but can happen scope creep happens all the time that's a good way to call it when you're when you're building um the decorator forgets that there's a thing called a budget the spouse forgets that there's a thing called a decorator and then you get into this stuff right not i wouldn't know anybody that that's ever happened to but um i've never seen you slam the computer down ever not one time so uh no we've we've actually learned to do it but we the the first time we did it it was not good so um but the um yeah what he said is he came late to this party this ramsey party and he's liking what he's

hearing but he's already committed on the balls down going on and i you know i i set this whole deal up on a 30 and i like what you're saying about doing a 15 so i'd rather do that that's what i heard and i actually believe him yeah i believe so what do you tell folks dave when they found themselves the the ship is out out of the harbor it's in the open sea and then they find us is is it okay to land the plane wherever they with with where they took off from sometimes you gotta like i'm walking into closing i got a 30-year note i don't have the money on a 15 and now i'm gonna work to um refi this down the road and i wouldn't refi it i just pay it extra and just pay it off in 15 yeah whatever i mean whatever the situation

is what you've got to decide is did i do something that's going to take me 10 years to walk through and get the direction changed? Or if so, you probably got a mess, right? Or did I do something that if I really focus on the new information that I have, it might set me back a year, but I'm going to keep going. Then you've got to decide how big the damage is. Okay. So if you, if you, let me give you an example, you signed up for a closing and the payment is on a 30 year and the payment is 55% of your take home pay. Well, you're screwed.

Right. Okay. So what you need to do is close the house and put a for sale sign in the yard. Cause that's, you're not going to get out of that one alive. Okay. Okay. and put a for sale sign in the yard because that's you're not going to get out of that one alive okay okay but i took out a 30 instead of a 15 and i've actually got some margin and i can pay it like it's a 15 but i never thought of that before hearing you you're not screwed right that's a different thing okay so you just gotta you gotta assess how much damage you've done to yourself now that you've got new information to measure it by. And then you can decide how dramatic you have to be about the undoing, the unwinding of all this.

Interesting thing, talking about getting into debt and getting out of debt as an example. Larry Burkett used to teach this stuff. He was a guy that I used to hear a million years ago and got to be friends with him. He was a Christian teacher on what the Bible says about money on Christian radio. And he was an icon in that space and taught me a lot, a lot. And he used to say that when they were coaching with folks, they would see people, if it takes you three years to get into the debt, expect it to take you a year and a half to get out with if you turn the ship and be very intense so if you've been making this mess for a decade don't be surprised it takes you five years to get

out of the mess you took that's a good that's a good algorithm i like you know and even if you get very focused and very because when you were making the mess you were you were kind of you know you're just kind of wandering and and when you're cleaning up the mess, you're very focused and intense. So you can cut the time down, but don't expect to clean up a decade-long mess in 26 minutes. Okay. You know, you expect it to take a little while. You dug yourself a freaking hole here. You know, so that's his.

Larry would have never said that that way. He was a gentleman. He was not on mainstream talk radio this is the ramsey show dr john deloney ramsey personality is my co-host thank you for joining us, America. Open phones at 888-825-5225. Brandon is up. Hey, Brandon in Atlanta, how are you? Hey, Dave, can you hear me? Yes, sir.

What's up? Hey, Dave. So I just got a hold of the Total Money Makeover about two weeks ago, and I finished it. I'm calling because i'm a graduate uh from florida i just moved here to georgia for business purposes cool what'd you get your degree in uh marketing cool so you got the new job huh yeah yeah i actually work in the insurance industry so i just finished my pnc and life and health license. Yeah. But I use a lot of the marketing for my soft wash business, which is really why I moved over here.

Yeah. Sacrifice. So here's my thing. My monthly income is 27, 14 a month for insurance. And I, my, my for the year,

I just opened the business in March and at the end of the year, 2023, revenue was $72K. So my debt is $31,000 in student loans and $33,000 in a Ford F-150. Kind of lost your mind. I know, I know. My game plan is to immediately start attacking the student loans. And then as soon as I finished that principal, principal, principal on the truck, get that out of the way. Cause really good for you. Although I, although I'm making money in my head, I I'm not after reading your book i'm really good changed my my thought process good you're right on track man yeah because you need you need 65 000 and you make 110 yeah yeah exactly and it's really like i'm not satisfied until i'm out of debt and i'm learning

well first and foremost i want to say thank you for writing that book i mean you don't realize how much people you probably help. Thank you for reading it. I wrote it when you were born. That's amazing. Very cool. It's been rewritten a couple of times. We've re-upped it. We're re-upping it for the 20th anniversary.

It's coming out again in April. But, yeah, man, that's very cool. I'm proud of you. You're doing good work, and you read something, and you believed it, and now you're going to act on it. You're why we're here. We're proud for you. How can we help other than that okay so after i finish my debt snowball i already have my

emergency fund i'm going to attack my wait wait wait wait wait wait wait wait you already have your emergency what's your emergency fund how much a thousand dollars oh your first baby step your little emergency yeah okay now then when you finish when you finish getting out of debt then you build the emergency fund baby step three right exactly yeah okay so my my question is should i be i do monday all right so monday through friday except tuesdays it's a it's paid, but I work in insurance. And then Tuesdays, Saturdays, Sundays, I'm running the show for the business. Should I be pulling out income from that and paying myself?

What I'm doing now is I leave it in the business. Like, I don't touch that money. But I don't know if I should be paying myself. Why would you not pay yourself? You made $72,000. Taxable income. Where does that go? What do you mean?

In 23, you said you made $72,000 on your business. Was that gross revenue or taxable? That was gross revenue. Oh, you don't make $110,000. Okay. I thought you meant you made $72,000. You mean you grossed $72,000. What's your net profit on the $72,000?

What was your taxes on that? So my taxes was 30%. It wasn't on $72,000 because you didn't make $72,000. You brought in $72,000, but you had expenses. Exactly. you brought in 72 but you had expenses exactly my net income in other words was 60 60 it was a little under 60 oh god you got a huge margin in this deal yeah i do now hardly any expenses yeah it's a learning curve like so where did that 60 000 go that 60 000 is sitting in the bank.

Great. Pay off your truck. Right? Today. That's what I'm thinking. Yeah. I'm afraid, though, if I take 30. Why are you afraid?

I'm not afraid. My question is, if I pull out 30 and pay000 and pay off the truck, and I want the business to grow, I don't want it to be like, oh, you got $30,000, and it's – I believe it will grow. I'm going to make sure it grows. It doesn't cost you anything to grow it. You grew it from nothing, brought in $72,000, netted $60,000. So do that again. Yeah.

Yeah, you're right. And that's why I was was asking because people have advised me dude people are idiots i do not want to deal with somebody owning my life nobody's going to own your life you're doing great man if you take this you're going to make more if you don't reinvest a dime into this business you didn't put any money into it last year did you no if you don't reinv you don't so don't put any money into it last year, did you? No. If you don't re-invite it, so don't put any money into it this year and grow it from 70 to 110 and net 80 on that. There's nothing to be afraid of.

I hear you. I'm more afraid of your truck payment than I am all this other junk. Yeah, I just got this truck, and it's all nice and stuff, but now I'm realizing, like, really? Yeah, really. What was I thinking? And it's after reading the book you know i'm i'm gonna pay both the truck and the student loan off by the first of june ready set go agreed okay you're the man i love you man you're you're why i do this it's so cool hey he agreed on uh national radio yeah this is

it's a binding contract. And we know where you live. Exactly. No, we don't. With his soul. That's right. That lets a lock right there. Nancy's in Charleston, South Carolina.

Hey, Nancy, what's up? Hi. Thank you for having me on the phone. I've been wanting to ask you this question. So I'm going to give you the question first. Yes, ma'am. Is it waste of money to sell my rental property, even though I might lose about $200,000 to $250,000 from capital gains and fees and all that comes with selling the house. So the house is...

Can I ask you a couple questions? That's a lot of capital gains. That tells me that you're going to have a profit of over a million dollars on this property. Oh, wait. Okay, so then let me give you the numbers okay all right so the house is worth 800 000 right how long have you owned it we bought it 30 years okay and it was 120 000 have you have you depreciated it on your taxes when you did the taxes you know know, I don't know. Do you have somebody doing your taxes and helping you?

Yes. Okay, they've been writing the house off during the time you've been renting it, and so you have a basis of close to zero. So your taxes will be around 15% of $800,000 minus the expenses to sell it. So, I mean, you probably have $100,000, maybe $100,000 in taxes. Okay, okay, good.

Who told you $220,000? I was just looking up, like, how much the capital gains are, and then because my father is from a foreign country, and I saw that it was 30% of capital gains, and in my part would be 20%. No, capital gains are 15% in the United States. Is this in the United States we're talking about? Yes. Okay.

Yeah, it's 15% unless you make over $400,000 and then it's 20%. Is your household income over $400,000? No. Okay. Then it's 15% of your gain, and your gain is probably all of it because they probably depreciated your basis down to zero. So it's going to be about 15% of 800 minus sales expenses. So before you make this decision, sit down with a tax professional and let them actually do the calculations, not some goober on the radio like me.

I think I'm pretty close, but you need to know real numbers before you make a decision on something this big from a professional. So sit down with a good tax pro, let them calculate it out for you. And you're going to find it's going to be right around a hundred, but make sure it is. This is the Ramsey show. Are you working the baby steps? One of the smartest and most impactful changes you can make is to ditch your cash value life insurance plan, if you have one, and replace it with a term life policy. Listen, the only thing a cash value policy is good for is overcharging you for the life insurance and then paying you a crappy rate of return on your overpayment. Stop wasting your money and really focus on getting out of debt and growing

your savings. For over 25 years, I've trusted and used Zander Insurance to find the best rates on term life insurance from the top rated companies. They keep the whole thing simple. You can apply online or over the phone, and they even have low cost plans that don't require an exam. Go to zander.com or call 800-356-4282. Even if you don't have a cash value policy, if you're one of the 70% of people who have no life insurance or not enough, it's even more important to get this done. 800-356-4282 or Zander.com. Dr. John Deloney, Ramsey Personality. I'm Dave Ramsey, your host. Thanks for joining us.

Kimberly is next. Kimberly is in Boston, Mass. Hi, Kimberly. How are you? I'm good. How are you, Dave? Better than I deserve. What's up?

All right. So here's the story. A year and a half ago, I got divorced and I remarried. And my husband now and I are trying to get situated and basically rebuild our lives and get our finances all in order. And right now, we can put it down on paper and create a budget and stick to it. But it still seems somehow that we're overdrafting our accounts at least twice a month. You wrote out a budget that causes you to overdraft? If you're sticking to your plan, your plan was to overdraft?

It wasn't my plan to overdraft. Oh, then you're not sticking to your plan. I think we might have our budget off. I think you're not sticking to your plan. Yeah, who's not sticking to their plan? Unless you wrote out a plan that says i want to overdraft intentionally you are obviously not executing the plan is that fair fair yes okay so you're not sticking to the plan why not

things like pop up that we weren't aware of and things like that, and I think that's where we're getting... Like what, pizza? No, honestly, we go out to eat once a week. Okay, like what? What popped up? Well, I had to get a lawyer to end up getting custody of my children from my ex. When did that pop up? That just popped up recently within the past couple of months. Okay, and how much was that? $3,000.

Okay. What else has popped up? I don't think we're paying attention to exactly like all the subscriptions that we have and things like that. That's not a pop-up. That's an intentional exclusion okay so your budget your budget's not thorough okay let's back up you're not doing as badly as you think you are okay okay and i'm not going to beat you up like you're a complete failure because you're not here's what normally happens when you start doing a budget it takes 90 days for it to work the first month you suck at this because you've never done it the first time you drove your car around the block you weren't good

at it okay but now you drive a car without thinking put on your makeup eat a big mac and change lanes right okay that's what you'll get to later but right now you're brand new at this and one of the things that happens when you're brand new in your first month of budgeting is you leave things out that you shouldn't have left out you just didn't know you forgot about them okay kids activities at school we didn't budget for it because we forgot they do that well of course they do that but when it comes up it's kind of obvious but when we were sitting down on a piece of paper or sitting down with the every dollar app we didn't think of it okay lawyers a different category but subscriptions i forgot about them and then when i you know when i did my budget

the first month i looked down it robbed the money out of my food budget and so now i'm crashing over here and well you won't forget about them the next month you're either going to cancel them or put them in the budget right yeah kids activities we're either going to not let them go or we're going to put them in the budget right yes um what's another one um but but some of these things that you have fewer and fewer surprises the longer you do this because you get better at it, and all the other surprises are now in the budget after 90 days. So after 90 days, you'll be a budgeting pro. It takes three months. First month is really bad.

Second month is a little better. And the last month, you've got it dialed in. Now, lawyer stuff, that is a legitimate, you know, that's like the transmission falling out of your car. That is an emergency you couldn't see coming and you don't have any money, right? Correct. Okay. So that's a different thing.

And that's not really a surprise because we knew the X was a jerk. That's why he's called the X. But overall, the lawyer bill is a surprise. Yes. Okay. So there's some things like that. But, okay, let me give you an example. A car breaking down is not a surprise.

You know, a $200 alternator going out on the car, a $400 alternator going out on the car, it's not a surprise. It absolutely is going to happen it's just a matter of when the only thing that surprises the timing we know the tires on your car are going to wear out we know christmas is in december they don't move it it's not a surprise but it still sneaks up on people so that's the kind of stuff i think you're okay number one recommit to uh beans and rice rice and beans no eating out no going out to eat no vacations we're going to put a bunch of stuff on craigslist and sell it try to create some money we may look at some extra income from doing some kind of side job and we're going to be really really really really really focused on this

and get the every dollar app out and get the budget going because it's got a lot of categories that will remind you of things you might otherwise have forgotten if you were just using a yellow pad to do this. Yep. Okay? But also give yourself a little grace. It does take three months to get good at it. No one does it the first month perfectly.

There's no one that nerdy. If they were that nerdy, they were already doing it. All right, Kimberly, I want to ask Dave a question, but I'm going to use you as an example. Is that cool? Sure. So Dave, here's a concern I have across the board, and that is you make your first budget or your second budget and then if you've committed to living a debt-free life and then a three thousand dollar expense pops up that's pretty high so let's say a six hundred dollar expense pops up okay you're gonna have to go into those other categories if you're gonna stay committed and you're gonna okay we're gonna have to figure out how to do groceries for 75 bucks instead of 125 yeah we're gonna have to figure out how to we have to turn

the air conditioner down we're gonna have to or up we're gonna have to well normal no it's it you're probably gonna go pick up a job or go get a second but but this idea is like no no we're gonna go out to eat once a month we're just gonna overdraft yeah what i don't want us to ever lose sight of is if something happens something happens you have to if the wind changes you have to adjust the sails it's uncomfortable it stinks it's not what we planned but it is right it's it's a reality no i shouldn't say if when the wind changes adjust your sales because there's going to be stuff that's unexpected come at you and then you go okay how are we going to handle this so like to john's point kimberly one of the things sharon and i did that we've had to teach other people to do but it came natural to us we

went we were bankrupt no one would loan us money so we didn't have an option we don't borrow money but we also can't borrow money at that time right so so we had to figure it out without debt so we had to figure out i got to put something you know on craigslist and sell it i got to go work a side gig and i need some money by friday oh my god you know and so we had to anytime something came up that hit us right square in the nose we had to figure out increase the income and sell something and decrease some of the categories temporarily till we can get around the corner of this we didn't have a choice and so what our encouragement is is to take overdraft which is a form of debt off the table disconnect your disconnect overdraft and

quit never ever ever let something come out of your account that causes overdraft again ever again pretend like you're running a company for someone else and if you ran it this poorly they would fire you okay and um it just creates a sense of fire and urgency yeah there's this absolute um you know absoluteness that's not a word to this idea this there's this you don't have an option and when you kind of when you burn the boats and you can't leave you've got to deal with what's in front of you'll innovate and figure it out exactly you you got to innovate you got to adjust the sales so you're better at this than you think you are and what you're facing the the distress and the frustration and it it was kind of knocking the confidence out of you like this may not work i may not be able to do this you can do it you can

do it what you're feeling the emotion you're feeling and the actual experience you're having is very normal the trick is don't agree to live in it make a make adjustments so you don't live that way okay okay you can do this i'm proud of you yeah you got have you guys been through financial peace university we have not yet i oh you need to go through i'll give it to you you got to go through it yeah i'll give it to you. You got to go through it. Yeah, I'll give it to you, and I'll give you the EveryDollar app connecting to the budget, too, the upgrade, the premium. So you got the whole kit. If you'll go do this stuff that I teach you, it'll work, Kimberly, 100%.

But it never works instantly. We don't sell microwaves. We're in the crockpot business. It takes a minute. You got to cook it, baby. You can do it. You can do it. This is the

Ramsey Show. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Dr. John Deloney, number one best-selling author, host of the Dr. John Deloney Show on the Ramsey Network, one of the more popular YouTube and podcasts in America today. He's my co-host, open phones at 888-825-5225. Jennifer is with us in San Antonio, Texas. Hi, Jennifer. Welcome to The Ramsey Show.

Hi. Thanks for speaking with me today. Sure. I really appreciate it. I love you, Dave, but I think my question is probably a little more for John, so not to, like, hurt your ego or anything, but I have. Hey, he's got two PhDs. I just have one and mine is in

in his ego trust me it's doing just fine sorry sorry my bad i just i was like i never thought i called dave ramsey show and then not want to like totally focus on dave ramsey and papa dave you're so sweet you're awesome you're sweet how can we help? I'll be okay. How can John help? What's up? I'm calling because, so I had a bankruptcy in 2021, and, you know, I'm debt-free. And, well, I'm debt-free after, you know, paying the KGB, I mean, IRS.

And then I was one of the very few that had their public service. You know, I worked for the federal government, and I was one of the very few that had their loans forgiven. I worked for the federal government for 13 years, and I feel like a lot of shame. I feel shame about the bankruptcy, but then I also feel a lot of shame about the public service forgiveness in a way. Because, like, I mean, I took advantage of the program that was available to me.

And I'm proud of serving the government so long. But I guess I feel a little, I don't know. I tell people not to count on it all the time. And that there's, you know, all the data shows that very few people are ever going to have it happen to them and don't want them to count on it you know I just happen to be in that window where it worked for me and so it's like I won the lottery but I'm like ashamed that I won it a little bit and yeah so Jennifer Jennifer I'm actually going to change direction a little bit is that okay okay yeah um when it comes to shame i can talk about it all day long but lucky for you you you how you call the number where there's more

than just um academic answers okay i actually think the person you talk to is dave he's been there okay well see i have what do i know? The guy with the PhD doesn't know. I can talk about it, but Dave can talk from a lived experience, which is much more valuable. So what caused your bankruptcy? You know, I made good money, but I have a disability, and I was only going to work like two weeks a month. After my brother died died the disability became so

extreme all these medical issues that had come up so even though i was following the dave ramsey plan like what's the nature of your disability honey uh i have major depressive disorder and um after my brother died i became like suicidal, and it was really extreme. And you had debts that you couldn't pay because of that. Yes, I was making bare minimum payments, and then I went to the bishop to even get help. So for a year, about 18 months, the bishop and I literally sat down at my church every month, like, how can we dig you out of this hole but the medical bills were still so high that I still couldn't even though I had this big shovel the medical bills just kept

coming and then I couldn't I was really struggling to work over and over hey do me a favor Jennifer you take a real real deep breath, as deep as you can. Take it super deep. And I want you to hold it for three, two, exhale. There's a lot of people in the world that are giving you a lot of advice and running their mouth and telling you should be doing this. And Dave and I are not going to do that. We're sitting here with you. Okay. Okay. You don't have to, I can, I can hear you trying to outrun the shame in a circle right on the with you okay okay you don't have to i can i can hear you trying to outrun the shame in a circle right on the phone with us you don't have to do that okay okay here's the thing we're with you when i filed bankruptcy at 28 years old the reason for my bankruptcy

was i had borrowed too much money I had borrowed it in such a way that it allowed the banks to come and take my freaking head off. It was my fault. I don't think a person who has issues with depression becoming depressed after the loss of their brother is something you did wrong. So my actions were shameful. Your actions were not shameful.

Well, I feel like the debt actions were shameful that I put myself in such a bad position. You were vulnerable because of that, but you probably would have made it without bankruptcy if you hadn't been unable to work for a period of time yeah the bishop said that actually when we sat down i mean every month he's like if you weren't so sick now i think we could help you like he was helping me even with rent you know but at one point he said you know tithing and the you know because we're stewards of the Lord's money, he's like, this is a hand up, not a hammock.

But every month I see that you're putting everything you can into paying. But I think this might be our only way out. Okay, so let me ask you this. It's obviously the loss of your brother brother that tragedy is in the rearview mirror are you doing things to deal with the depression issues yes i see so what i did in my case was in my case was i did something some things to deal with my stupidity and so i'm not going to make the same mistakes again and therefore I don't have to sit and be wringing my hands about the shame of the bankruptcy the bankruptcy in my case was caused by me

so there was shame it was shame inducing for sure okay but the way I dealt with it to answer your question was I said okay how what steps do I have to take to be a different person that causes this to never happen again if I take those steps then the things in my rearview mirror it's just one of the many stupid things I've done in my life that I don't have to do again yeah and Jennifer can we agree that sometimes you feel things and those feelings aren't true yes okay it's true I know that to be I know but listen not all the time but you feel things and those feelings aren't true? Yes, that is true. I know that to be true. My husband tells me that all the time.

I know, but listen. Not all the time, but it does come up. Here's what you're going to do. I want you to keep a journal with you of the things you feel. When you feel like you're taking advantage of folks and you feel like you should, I want you to write that down and I want you to hold it at arm's length and ask yourself, is this true?

Okay. And I want you to be objective about it because if you can't be objective, take it to your counselor and say, is this true? Because the answer is going to be no. But when you have a feeling and you begin to believe that feeling, then your body's off to the races. Yeah. Zero shame. Zero.

For the student loan forgiveness. No. And the shame on any part you had with irresponsibility you say i'm not doing that anymore any part you had with taking on too much debt i'm not doing that anymore but the depression taking you away from work i'm not blaming you for that one kiddo that one's in your rearview mirror too, though. The beautiful thing about life is the rearview mirror is smaller than the windshield. That's called grace. Walk in that, kiddo.

This is The Ramsey Show. Buying your first home is a big deal and sets the stage for your financial success. So, work with a mortgage advisor you trust, not just some random website. Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step. Learn more at churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Dr. John Deloney, Ramsey Personality, is my co-host today.

Ryan is in Chicago. Hey, Ryan, how are you? Doing good. How about yourself? Better than I deserve. What's up? So I was just calling because I've recently gotten some good news. I'm having a baby on the way. I'm very, very excited for it um but i just moved back up north i was living louisiana for a while and i just got a job up here uh i just do sales and she is talking about moving to louisiana because that's where her family lives and

obviously you know i'm not gonna this is weird what do you mean she's moving to Louisiana and you're in Chicago or not to Louisiana it's a Tennessee I apologize why is she moving and you're not I don't understand what's going on so we are we're no longer together oh and yeah yeah so lead with that next time dude that's a big part of the story for a minute i thought we were a happy little family with a picket fence okay no not not quite yet not even no not even hooked up with your ex she's pregnant so who i mean your ex-wife or girlfriend uh girlfriend girlfriend how long ago did you break up in quotes uh about a month ago almost three weeks to a month.

We still talk every day. We're on good terms and all that sort of good stuff, which is what I want. If we are going to be separated, I'd still want to be friendly and all that good jazz. So I just had a lot of questions as far as moving down to Tennessee because they did she did ask me uh or she was interested in me doing that so I could be closer to them and I just had a lot of questions about you know budgeting with the baby and doing just like oh this you know trying to find a house down there and how would you how would you how would you go through that I don't I don't have very much that I have like 500 on my credit card that and that's pretty much it um so and that's getting paid off uh so luckily i'm about to be out of

debt which is a very good feeling but how long have you known about this what was that how long have you known about this uh we found out um we found out no i don't, we didn't. She did, and then when did she tell you? You're not together. Yeah, December, when we were living in Louisiana, and then we moved back up. We were together still, and then we just recently separated. You're confusing me because I think you're so jumbled up. So are you telling me you knew she was pregnant

before you broke up yes yeah yeah it's been a it's been a mutual breakup so it's not been like any any sort of so you didn't recently find out you were pregnant and get this good news that's what you led with that wasn't the truth uh you knew she was pregnant and you broke up with her that way why'd you break up with her um we just we just argued a lot it was a lot of just back and forth and so here's here's the deal this woman is going to be in your life for for um the rest of your life yes and so whether you get back with her or not um it sounds like there's a lot of YOLO and, well, we just argue, dude, you're, you gotta be past that now. You brought, you're bringing a human into the world. Yeah. I would get with a relationship counselor ASAP because y'all gonna

have to learn to talk, to communicate, to, you think, you think being together and raising these kids hard, you're going to try to do it in separate houses? It's going to be chaos. It's hard, hard, hard, hard. And the fact that you haven't already moved, I don't even know what we're talking about here. My daughter has been gone for four days, five days, and I'm having trouble breathing. I can't wrap my head around your thought process. No, so that's where I was.

So I am going to move down there with them. They're going to be doing that. No, not with them. Y'all broke up. You made a big boy decision. You broke up. You're going to move your butt down here by this child, and you're going to work to learn how to communicate with her.

There's not a with. Yeah, I'm going to live near them. That way we can raise the baby together. Actually, it's not not even near them it's near the baby near the baby you broke up yeah and y'all are playing dating still on the phone that's why i don't think y'all are done i think y'all acted immaturely and things got stressful and you just split up yeah pretty much everything you've done has been an impulse decision all of these decisions have been impulse. The moves, the pregnancies, the shacking up, the breaking up, the moving to Nashville or Tennessee. You guys make decisions about every 30 seconds.

And that's not good for your finances, but it's fine until you decide to bring a human into the world. It's not good, period. You never make good decisions this way. Y'all need to slow it down. Slow your roll. Slow down. These are big boy, big girl deals.

You can't, you know, breaking up with someone that you have a baby with is a big deal. Well, we're arguing. Oh, well, give me a break. I've been married 43 years. We're arguing is an ongoing. I wasn't going to say it it but i've been in the room with several of those yeah um we're arguing means she told me what to do and i didn't do it wait a minute that was today but this idea that um we're just gonna break up because we're arguing you're

gonna argue the rest of your life because y'all are raising a human together and so figuring out how we're going to communicate even if y'all go in the room and say hey we're done romantically but we're going to figure out to do this um at least give it a shot for the sake of this kid all the data suggests y'all have to be working together for this kid to be to have a shot yeah yeah so yes i work together with you to move into tennessee but i want you guys, both of you, to make slower, huge decisions. The good decision-making paradigm is this. The more important the decision, the more information you need about the decision, and the longer time you should take making the decision.

You've done that the opposite on all of these fronts that's what's killing me here so you can impulse a pack of gum if you're going to buy a car you need to slow down and take your time it's a lot of money okay if you're going to choose to you can impulse uh walking across the room and talking to a girl you don't impulse breaking up with a girl who's got your child inside of her. Or think it this way. Because of some arguments, you have decided, I want my child to have a single mom. I'm going to be very careful about that decision. Very careful.

Yeah. So I'm picking up, picking on you, but dude, we love you and we want you to win. And we're observing the patterns there. I want your baby. And if you don't break those patterns, you're going to replicate them. And that's what I want for you. And I want that for your baby as well. Yeah.

The most positive thing you said in the entire conversation is how excited you are about the baby. As you should be. And that's wonderful. That's good news for the baby and good news for you. It means you're a good man. So work through these, um, slowing down on big decisions. And so, you know, before you decide to move to Tennessee and chase her, um, you probably ought to go meet with her and a good relationship counselor. Talk about what it looks like if you made the move. I'm going to give you three months of free BetterHelp

with a licensed marriage therapist, licensed relationship therapist that will talk to you guys. So hang on the line here. We'll get you hooked up with that. There we go. And then y'all can talk from different states even if you need to. But y'all can begin. I think you probably do need to go to Tennessee,

but I think you should do it in a different context in the sense of you ought to have made the decision. I've got a good job move when I make the move. I'm not just going to go down there and hope, hope it works out. I got a place already. I got a place figured out. I've got a set of relational boundaries and rules involved with this ex-girlfriend and how we're going to work on the child. What are the financial implications? How much are you going to child support? What are those kinds of things?

All of this ought to be, you ought to have all that figured out before you move. And it might take you a month to figure that out. And you got a month. So slow down on big decisions. Get more information and more information and more information. When you've got all your information stacked up and you go slowly, we call that wisdom. It's the opposite of impulsing.

This is The Ramsey Show. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones in the lobby of Ramsey Solutions on the debt-free stage. Nathan and Danielle are with us. Hey, guys, how are you? We're great, Dave. Good to be with you guys.

You too. So where do you live? Arlington Heights, Illinois. Ah, Chicagoland. All right, welcome to Nashville. And how much debt have you paid off? We've paid off about $130,000 in debt. Very good. And how long did that take? Six years. Six years. And your range of income during that time?

We started at about $40,000. We were bumped up to, what was it, $130,000? $132,000. And then actually in about a week and a half, that's going to jump to about 160. Okay. That's pretty impressive, you guys. I mean, 40 to 60 is pretty cool. 40 to 160. So what happened to your careers? What do you all do for a living? It's a lot of extra Uber, man.

No, they bought Uber. I mean, why not? Uber and Lyft was part of that for about six months but uh it started out we graduated i graduated from uh grad school we'd gotten married six months prior to that what's your degree originally i had a degree in athletic training which similar to physical therapy for people that don't know but more college setting high school setting things like that at some point a couple of years into that, I was thinking about the career, thinking about, you know, we're going to have kids one day. And I was doing a lot of traveling on weekends with

like football teams and things like that. And wanted to, I was thinking about the time we'll potentially lose with kids when we had them. And so I started looking into a career change fast forward we cash flowed a I got my MBA online graduated in the end of 2020 and then maybe nine months later or so made a career change into third-party risk I was working and which is what I do now so okay cool and what do you do Danielle I am a paralegal in a class action law firm wow good for y'all okay great careers quite a quite a trek how long you've been married seven years seven years so one year into the marriage you start this process and you go on this journey on his career track uh which leads you into much much higher incomes over time what kind of debt was

the 130? Guilty as charged on that one. That would be all my student loans and a little bit of medical debt. I hadn't charged you. The paralegal, huh? Yeah. Okay. All right.

I'll go with that. Cool. So what happened after a year of marriage that you said, we're going to get out and we're going to do this Ramsey stuff? How'd you meet us so about five to six months into our marriage my grandma ended up passing away and she left me a amount of money that was equivalent to pay off my first two federal student loans and we had read the total money makeover and we're like we can do this let's go let's get gazelle intense and let's pay this off. And we did. And we had read the book, my spring break of my last year of grad school.

It was a wedding gift, actually. And we just kind of sat on the shelves like, yeah, we're a bunch of poor college students. We're a bunch of students living on, I don't know, it was maybe less than $1,500 a month, if that, maybe $1,200. So then read it over spring break and was thinking know thinking towards you know we'll finally get you know real jobs real income and i was like hey like this seems uh seems like something that's pretty feasible you know um yeah that was kind of okay got after it then knocked it out and here we are six years later you know making serious bank and no payments in the world when did y'all start dressing exactly like in public so all this started early on in marriage john so i've been forcing him to dress similar to me

ever since you're a good husband man here's a picture over here they're doing it too no i thought like you're a good husband man well done yeah that was uh christmas photos there uh this past you know past christmas time so what was the biggest challenge y'all faced internally? Like the one behind closed doors that you don't talk about. Right, yeah. I know I told everybody on the radio. Probably, I don't know if there was one specific one, but just, you know, we, like I'm sure so many other people, it felt like after about two years into it, it's like, you know, we're trying to grind through this.

And, you know, we'd start getting that, you know, it was like almost fatigue from it. And, uh, sometimes she would feel that way. Sometimes I'd feel that way. And I was like, so we're trying to kind of pull, you know, pull and push each other along and say, no, like we got to stick with the plan. It's going to be okay. You know? Um, and you know, fortunately we, um, sometimes kicking and screaming, sometimes less so, but, you know, fortunately we were able to stick to the plan. Yeah, absolutely. And I think the other thing too is about four years into our marriage, we tried starting a family and unfortunately just, we went through the wilderness of infertility and infertility is not for, I wouldn't wish it on anybody. So having to struggle with that cashflow, um, those treatments and then going through three rounds of unsuccessful fertility treatments that that really tried and tested us but we remain faithful we remain we said god you've got this

you've got us we're going to keep trusting you and we just kept pushing forward and i hear that little screaming in the background yeah yeah that was uh so it worked yeah uh no actually it didn't oh tell us about that story so um it was our third round of iui had failed it was the friday after we had that news i was sitting on my kitchen floor sobbing asking god why and then i told him you know what lord i'm done i'm gonna be done i'm giving this to you let's focus on other things let's keep paying off the debt two and a half months later find out we're pregnant of course yep of course i love it wow that's so cool congratulations thank you thanks proud for y'all what a wonderful five years yeah and what a very hard five years yes yeah wow very cool

congratulations all right what advice do you have to somebody who's facing what y'all were facing don't you ever give up. Don't ever give up. Keep pushing forward. Seek counsel when you need it. Seek help from your church leaders when you need it. Don't be afraid to reach out for help. I think about too that, you know, we certainly weren't perfect at it. We'd had, you know, a month here or there periodically where it's like, you know, maybe the budget got blown up by something or maybe we just, you know, you know, had a lapse in just had a lapse in judgment, maybe spent $100 here or something like that. And I was like, looking back on it, that was a mistake. But don't let those things get you down.

Don't let them take you out of it. So just get back on track and keep pushing. Back on the wagon. Back on the wagon. Absolutely. I like it. I like it. Well, congratulations, you two.

Thank you. And the little one's name is what? Eliana. Eliana. So is Eliana going to be in the debt-free screen? She is. All right. Well, we've got the every dollar subscription for you guys. Thank you. For one year. We've got two of them, actually.

Two one-year subscriptions. One for you and one for you to give away. So we'll get that to you. Oh, she's precious. Oh, thank you. She is so cute. Thank you. That's fun. And for the you oh she's precious oh thank you she's so cute thank you that's fun i hope for the listener she's wearing the same color shirt there you go just to be sure we noticed that i love it way to go you guys so proud of you you're heroes thanks you took control and that little baby's got a whole different life because of you two well done very well done all right it's nathan and danielle and eliana from the chicagoland area 130 000 in student loans paid off in six

years making 40 to 160 count it down let's hear a debt-free scream three two one we're dead free yeah yeah that's how it's done well she wasn't even scared no i think she's heard mama do that several times been practicing in the practice room that's right been practicing i like it good stuff very cool very cool one of the things that we see mean, if you get out of debt in six months, you know, you don't have this, but if you get out of debt and it takes you three years or four years or five years, or in this case, six years, you can almost be guaranteed that during your debt-free journey, you're also going to have a life event or six. There's always going to be something you know um in their case they were dealing with infertility and having a baby uh we had a debt-free screamer on yesterday had two

children during the time they were getting out of debt that's big life events it's not it's not like this stuff happens in a vacuum because if you could just sit and do nothing but this in a monastery you know i mean, there was no... You get it done. Life doesn't stop. Yeah, there's all this other stuff coming at you too, which does require you to have that tenacity, that perseverance. You know, it's wonderful that you can walk through all of that at the same time. That's the proof text.

That's when you know you got it. This is The ramsey show well let's face it taxes are confusing and they piss me off i don't like paying them i don't want to do it i don't like this time of year and then you get all these people in the tax business around you you guys are not around me but i got rid of them a long time ago but they're trying to sell you but you know if you'll use our software we could sell you 14 credit cards and a cash advance on your refund oh my god they're just debt debt sellers they're credit card people that got a little tax thing waving in front of you like you're a bass and you bite on

everything that's shiny so don't do that go to ramsey solutions.com slash tax use ramsey smart tax if you've got a simple return if you've got a complicated return hit the tax elps and they'll Um, Dave's tax tip of the day, a tax refund is not a bonus. A bonus is a fund. This is a refund. A refund means it's already happened once and we're re funding. It means you already had the money once and you gave it to the IRS. You gave them too much more than you needed to give them in order to cover your taxes and then they send it back to you so in essence you have given them too much

money and they send it back to you though so you have a savings account with the federal government that pays zero interest and they send it back to you, and you feel, oh, well, it makes me, at least I know I don't owe $3,000. You're giving them $250 a month too much, and it makes you feel good? It doesn't make me feel good. It makes me feel stupid when I do stuff like that. So how do you fix this? You go into your W-2, and you change and get the right amount taken out. Go into payroll and have them take the right amount out. Now, what's the right amount? Well,

if nothing's changed in your taxes and you've gotten the same refund for the past four years, just take that refund amount and take the correct amount out of your check. $3,000 a year is $250 a month. Simple. $6,000 a year is $500 a month. $4,800 is $400 a month. Whatever it is, have that right amount. If something has changed, you may want to have one of the tax ELPs run your taxes or get the Ramsey Smart Tax Software, run your taxes, figure out what your actual tax bill is, and divide that into your paychecks and tell them to take that much out. Then you will be having the proper amount taken out you will not owe more than you have paid in but you will not have paid in too much the numbers that it's like 70 something

percent of americans get a refund i like to think of it this way you think the government's doing such a bang up job with spending that you decided you you know what, I'm going to loan you all some money for the year. Interest-free, just on me. That walked me into Debbie's office and said, I can't, I can't do it anymore. No, the DMV is so efficient. So proud of the work you do, I'm just going to loan you all money. Scary! All right, our question of the day comes from Max in Oregon.

I have a portfolio of properties that's worth about $3 million. My partner and I recently had a child, so we'd like to buy a house. I sold one of my properties for the down payment, and my partner chipped in $5,000, which wiped out her savings. She keeps asking me to sell the rest of my investments so we won't have a mortgage. I have a feeling she wants this so she doesn't need to go to work. I feel stuck and resentful because of the inequality of our financial contributions. Well, so this is a relationship that's not going to work, Dave. So, Max, it starts with when you have a partner instead of a wife. Right.

Are we dating? Are we married? I don't even know. I don't even know what's going on here. I can't tell. I can't tell if you're married and you think it's chic to say partner. Hey, partner. Or if this is a business.

You're killing me. It's a business. It sounds like, because you used the word partner, that you think this is a business. Right. That's the way this verbiage sounds, doesn't it? and so and and that if you were in partnership with uh you know uh a business partnership and it was in unequal well each of the parties in the partnership would have things that they were supposed to bring to the partnership are both of you going to bring what you're supposed to bring to the partnership then if somebody's not doing that then a business partnership you would have you would have this exact kind of discussion about that but before

you go to a business partnership hopefully you've discussed what each of you are going to bring to the table and what your goals what the expectations are y'all haven't done that here yeah you haven't hit that you haven't even gone that far with this but my point is is how sickening this sounds because it sounds like a business transaction instead of like me and my wife had a child and she wants me to pay off our house that we live in and raise our child and i've got a big old pile of money and i'm really loving my money more than i love my wife and my child. And she chipped in $5,000 and wiped out her savings. Ooh, wow.

She keeps asking me because she doesn't want to go to work. She married Max the Millionaire. Bro. Dude, there's just. I was going to say you need to check yourself, but you've already wrecked yourself, brother. Like, you got a mess. Got a mess, man.

Yeah, we just wore you out, son. Sorry but uh i'm not i'm you know what i can't stand this attitude because it is a attitude of i am superior to you because i have some properties yeah and you married a woman y'all created a human we don't know if we're married well we might be partners y'all y'all have a child together and suddenly well you got yippee-ki-yay oh my gosh yeah this gives me the gas dave max y'all need to go see a counselor asap yeah so so get this let me tell you if i could um be your best friend for a second your old uncle ugly dave and put my arm around you, I would say, love this child and this woman

so well that you marry this woman if you're not, and that you make those two your everything, and you do anything for your everything. Above your homes and your network.

You do anything for your everything. There you go. And that means you pay off your stinking house and you make a home and you pay cash for it and you create an environment where those two can both prosper because you love them more than you love life itself, certainly more than your tiny little portfolio of $3 million. This will cause you, my son, to be 80 years old and have no regrets. Worshiping at the altar of a $3 million real estate portfolio,

meanwhile making your own wife or should-be wife and child second fiddle to your stuff will not lead you to long-term happiness. Period. Easy. Easy. lead you to long-term happiness period easy easy so that's what we're seeing and that's what we were dancing around and being sarcastic and we know that all the crap this poor lady is feeling but dude you really are being a complete butt because you are completely worshiping the wrong things here you're completely putting the wrong things in the wrong order and um when a want when a lady has your child married or not and you are so superior with your three million dollars that you look down your nose and she paid

off her five thousand dollars i'm like dude like, dude, it's just nasty. It's nasty. So, sorry you wrote in. Oh, my gosh. But, you know, hey. The truth is the secret to happiness is long-term, high-quality relationships. It's not stuff.

Hello. Period. term high quality relationships it's not stuff hello period man i i just find myself overly um empathetic sometimes y'all give me a hard time off air but like i'm just overly this is one of the few ones that gets me fired up when somebody looks and just well the problem is is the downstream on it the problem is you and i know the data of where this kid ends up. That's right. If Max's brain isn't reaching. That baby will be born and really quickly

that nervous system will know, oh, daddy's rental properties are more important than me. Yep. And that's a recipe for chaos, man. Yeah, this is how you end up. And I don't know how little Johnny ended up being a bank robber.

I do. I do. This is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Dr. John Deloney, host of the Dr. John Deloney Show, number one best-selling author,

and Ramsey personality is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Matt is with us in Minneapolis. Hi, Matt. Welcome to the Ramsey Show. Hey, Dave and John. Thanks for taking my call.

Sure. What's up? My wife and I have been debt-free, 100% house and everything for five years. We are baby step millionaires and are currently in the process of going to build a new home. Good for you. Our existing home, our oldest son is interested in buying. It's worth about $365,000. He can only afford about $. I'm wondering your opinion if you know writing up a

contract and covering all the D's as you say like in a partnership percentage of ownership it comes out he don't 65% would retain about 35% ownership is that a bad idea how old is your oldest son uh 24 married and two grandkids but we do have two other children uh the middle child has already bought his he bought a house so what is your total what is your total net worth man man? 1.28. Actually, I was going to try to call yesterday. Oh, congratulations. How old are you?

I am 47. Okay. And what do you make a year? The last couple of years have been incredible. I'm an over-the-road truck driver, completely my own carrier. And with COVID and the supply chain, I've done $200,000 to $300,000 on my own the last couple of years. How is your health? Good.

Not perfect. Let's pretend you had 1.2 and let's pretend it made 10%. Every seven years it would double. And so it'll be 2.4 when you're 54. When you're 61, it's 4.8. When you're 68, it's a it's a 4.8 when you're 68 it's 10 million okay so if you make it to 70 years old and this money continues to grow and some of it's in real estate and personal homes and those kind of things but it grows in value right and if you continue to invest and if you continue to add to it on top of

that it's even more but you should have five to ten million dollars at your death that's a reason that's why i was asking you all those questions all right uh so what i would do here if you're going to do this um i would never do a partnership ever because you and your son will be just fine but this puts a different pressure on your daughter-in-law that's not fair to her you've interfered in their marriage you didn't mean to because you're sweet and you love your grandbabies but you would don't do that what i would do instead is uh if you want to sell him the house for $250,000 and it's worth $350,000, he just got $100,000 less at your death. Okay, so put that in the will.

That he gets $100,000 less at your death. Okay. Now he owns this house. He has no strings attached. He could sell it. He can paint it purple. He has no strings attached. He could sell it. He can paint it purple. He can go on vacation. It's none of your freaking business.

He owns the house. And all you advanced him was $100,000 of his future inheritance. Yeah, because that was kind of what we'd already thought is maybe in five, ten years they could refinance and buy the rest. Nope. I don't need this monkey on his back. He's 24 with two kids. Yep. Okay. We could just say out loud that Papa Dave over here understands that Papa Matt has grandkids disease.

Because when you love your grandbabies, you start doing stupid butt stuff for their parents if you're not careful. Yeah. And you might have grandkids disease. Because it's okay if a 24-year-'t do a 350 000 house it's perfectly okay in society yeah so no is a possible answer but if you want to do it that's the way to do it and i would even say a third option is give them the the grandkid discount and just to say i'm gonna eat a hundred thousand dollars in equity of quote unquote what you got to pass that on to the two siblings somehow yeah that's what i was yeah that's that's my reason for yeah but yeah i do like the idea of writing it in the will and we already have a trust yep and you know unless you're sick you're

probably going to have several million dollars. It's not going to be that big a deal for 100,000 of it to be out of his. Can you sell this house, though, and not have any strings attached? If he wants to plow up the front yard and put corn in it because he watched a YouTube video. Are you fine with that? Yes. No, there was a. I don't like that.

That was a stretched yes. You need to be able to come home and realize you got all the carpet up took all let's pretend he went and bought a house on his own that had nothing to do with you you can leave your hands off of that can't you yep then you got to leave your hands off this one okay if you can't do it don't do it it's a stupid butt house don't let this mess up grandpa land. Yeah, it's not worth your son or your grandkids. Well, yeah, that's the emotional.

We've been there 21 years. He grew up there. Well, how's the sisters going to feel? How's the sisters going to feel? Well, I said the middle child, they already bought a house. That wasn't what I asked. I didn't ask if they were homeless. I asked how they were going to feel.

I don't know. Probably would be some jealousy there. Yeah, I probably want to talk about it, make sure everybody's okay with it. This is what we're thinking about doing, sisters. You guys cool with that? That's why we do it at Ramsey's because we do all kinds of wacky stuff around the Ramsey's. But we always just say, hey, that's what we're thinking about doing. How's everybody feel about that?

And sometimes you just put the awkward crap in the middle of the table. It diffuses it. I don't know of a situation. I'm becoming more and more dogmatic about this, Dave. I don't know of a situation where not just putting it on the table isn't the best way to do it. It's the only way. Yeah. It's the only way.

Unless somebody on the other end is bent on hurting you or they don't have the capacity to hear what you're saying, you got to put it on the table. Yeah. Well, even then, I gave them a shot. Right. And then I could just put up a boundary on the other side. There you go. Yeah. I gave you a shot at understanding.

But if you know, we lived there 21 years. All our memories are there. I have that wallpaper there on purpose, I put that sink in there and that's my sink, then... Not anymore.

Don't do it. Not anymore. Yeah, you don't own it anymore. You can't control freak this. Yeah. And it'd even be worse if you were partners. Probably better

if you just don't do the deal at all, but if you do it, I gave you the mechanical way to pull it off and you gotta keep your emotional hands off of it and the sister's got to be okay this is the ramsey show dr john deloney ramsey personality is my co-host today matt wanting to sell the house at a discount

to his 24 year old son who can't afford a 350350,000 house but can afford a $250,000 house made me think it's a good idea to update what's going on in the real estate world. The interest rates started going up, and the market started slowing down dramatically about 15 or 18 months ago. And we did a live stream where I very emphatically said, the real estate market is not going to crash, values are not going to tank, and here's how I know that. And I went through several data points on the air, and we had several hundred thousand of you watch that live stream, and we covered some of that on

the air here to let you know that the real estate market values were not going to tank because a whole bunch of people were really upset that interest rates had gone up. They felt that the system had cheated them, and they were not going to be able to buy a home. They were frozen out of the home market, and they would sit on the sidelines and wait on the real estate market to crash and go down in value. And I explained to you why it was not going to go down in value, and it was a very simple proposition, except I went into great detail. I'm not going to do right now. But basically, it works like this. When there is a shortage of an item, it's called supply-demand curve in economics. If you had a decent economics class in the seventh

grade, you learned this, okay? The supply-demand curve works like this. When there is an over supply of an item versus the demand, if you got a glut in the market, if you can get them anywhere easily, there's not a shortage. Prices go down. When there's a shortage of an item or a service in the market, a scarcity, prices versus demand, prices go up. That's basic economics. Prices versus demand. Prices go up. That's basic economics. Okay? So items that are scarce go up more often than not.

Items that are easily available, readily available, widely available, there's too many of them produced go down in value does that make sense everybody kind of knows that that's kind of common sense if you think about it so here's the deal the there is less inventory of homes for sale versus the number of buyers today than there has been in 25 years. There's a shortage of housing versus the demand. Zero chance prices are going to go down on houses during that time. I said that 18 months ago, told everybody that. Dave, that video is not going to age well after the crash.

You're going to have to come back and tell people you were wrong. Well, instead, I'm here going, nah, nah, nah, nah, nah. I freaking know what I'm talking about. Okay, there's a difference, all right? I know a little about that stuff. I've got a degree in real estate. I've been buying real estate since before any of you were born. So hardly any of you. So spring is upon us. It's predicted to be another busy time for real estate. This is some stuff we

just picked up out of the press. Average interest rates for 15 year fixed rate mortgages are at 6.16% right now, down from seven and some change just a few weeks ago. So interest rates are trending down. Total housing inventory at the end of January was up 2% and up 3% from a year ago. Unsold inventory still sits at a three-month supply. And there is a tremendous number of new listings coming. So we're starting to see some supply come back into the market. That's what we're seeing. But we're also seeing buyers come back into the market that were sidelined, waiting on interest rates to go down or waiting on the crash. And for people who don't believe that, I bid on a house a week and a half ago,

two weeks ago, and I got outbid by four different buyers. There's a lot of multiple contracts are coming back. That's what the National Association of Realtors is reporting this. Okay. Low inventory has driven the median home price up to an all-time high. Prices went up. They didn't crash. You were wrong.

They went up to an all-time high of $379,000. That's the median home price in America. In February, homes went from being listed to going under contract in 17 days, and they were at 27 days. So they're selling faster. The market is heating back up, and this slight move in interest rate down, the grass getting green in some of the markets. We're seeing the real estate market heat back up.

We're seeing multiple offers in big markets like Nashville again. And let me tell you, I got my real estate license in 1978. The number of years during that, between 1978 and now, that you put a home on the market and you got multiple offers, it's been a very rare time. But prior to 2020, we were seeing some of it. And then, of course, after Fauci's pandemic, we saw people go crazy and they came out of their homes. They were quarantined and came out looking for new houses like a Baptist looking for a casserole. They were everywhere, man. quarantined and came out looking for new houses like a baptist looking for a casserole they were

everywhere man they were running around like crazy and and drove prices ridiculously up in 20 and uh out of control i mean like like 89 offers on a weekend that kind of stuff all right that y'all remember that that's just a 20 minutes like two two and a half years ago okay um and then it chilled it just stopped and the market has gone it's continued to move but it's very slow the volume has been very slow but still demand has exceeded supply and we've seen prices go up and now that the market's heating back up a little bit now we've yet again got even more demand than supply and we're seeing multiple offers again so if you are thinking about selling a house this is an excellent time to sell a house as a guy who's trying to buy one please sell your

if you're thinking about buying a house today you're out of debt you have your down payment you're ready to go and the only thing you're waiting on is you're out of debt. You have your down payment. You're ready to go. And the only thing you're waiting on is you're waiting on the real estate prices to come down or the interest rates to come down. Don't wait. Go buy a house right now if you're ready. Because the prices aren't going to come down. And if the interest rates come down, you can just refinance. So you marry the house.

You date the rate. That's how that works. The rate rate is temporary the house is dead gum so here's the thing median house price all-time high in history right now interesting and you thought 2020 was crazy and you thought 2021 was crazy all right i'm telling you i'm not predicting it to go nuts again but the idea that some of you are still sitting around waiting on this market to correct is hilariously stupid you're that wrong and david's not going to age well hey i've aged pretty well in general there's a couple things i've missed it on but i pretty much call it on a lot of these things i told you bitcoin was a scam i told you from the start even when all of you people that joined bitcoin like some people joined mary k y'all

were driving me nuts yelling and screaming at me like like i'd insulted your jesus or something it's crazy and it was a dadgum scam and we knew it was a scam from's crazy. And it was a dadgum scam. And we knew it was a scam from the start. We knew it was a horrible idea. And yet you walked around acting like you're sophisticated and do rooms. You just don't understand. Let me tell you guys, this is what's happening with real estate. I promise you, you can look up this particular YouTube five years from now and you're going to go, yeah, that old fart was right again. That's what you're going to do. It's exactly what you're going to do. So prices are going to go, yeah, that old fart was right again. That's what you're going to do. It's exactly what you're going to do. So prices are going to go up. Rates are going to go up and down, up and down, up and down. They always have and they always will. The only rate that you

cannot adjust is mine. My interest rate on my mortgage is zero because I don't have a mortgage. That's the only one you can control. So get the house, get the house paid off, go to Ramsey solutions.com, get you a Ramsey trusted agent to buy a house or to sell a house right now and quit believing all this fear mongering bull crap that's out there. It's listen, the market is slow, but demand still exceeds supply, and it has still driven us to an all-time high median price on house. Those are facts. That's called data. If you don't agree with that, you're what's known as wrong.

Seriously. So, if you're going to buy a house or sell a house, best times right now. I told you that same thing 18 months ago and i was right then too this is the ramsey show thanks for joining us american dr chandelone ramsey personality and real estate mogul is my co-host i i'm not a lot of things day but i'm not that i'm i'm a bumbling idiot you're number fourth in line among four people bidding on a house. In supposedly the falling, crashing, dying economy.

Real estate market ever. I don't know, John. You're a failure, I'm thinking. I could be wrong. I'm fairly certain you're on the right track. I made the mistake. I told my kids. I was like, like i'm gonna go in against the house guys oh god uh here goes daddy watch daddy you're gonna go back and be like your dad's a loser kids ed's in myrtle beach what's up ed hey dave and dr john thanks for taking my call i'll get right right to it. I'm 61 years old. I got divorced nine years ago.

The agreement, the divorce agreement or settlement was I would keep all the assets. I own a small business and have owned it for 35 years. A paid for house, paid for business property. And in return, I would give my wife a half a million dollars paid for $3,500 a month. And I've been doing that for quite a few years. I've got it down to $130,000 now. And every month, obviously that $3,500, you know, bothers me to pay her. And I talked, I go back and forth about just paying it all off I called her offered her um uh pay it off in full with a little bit of a discount she didn't accept that so I said okay I'll just keep paying you and you know I'm to the point in my life I'm 61 years old. How long ago was that?

Probably about a year ago. Okay. And how much money do you have? I have $1.1 million in our retirement. I just got remarried on Valentine's Day this past year, and we have $1.1 million and $70,000 000 as an emergency fund and your real estate's worth what uh my house is worth about 450 maybe a little more and my business property is probably worth about 400 and then my business if i sold that that'd be worth anywhere between $1.5 and $2 million. So you got a net worth around $5 million, yeah.

Okay. Yeah, pretty much. And you can gain, out of $5 million, you can gain yourself a ton of peace and a whole new look on a brand-new relationship if you write a $130,000 check. Yeah. Do it. Yeah. Do it. I. Do it.

I'm going to do it. I was hoping you'd say that, and I just stayed on the phone for an hour and 15 minutes to get out and talk to you. I wanted to hear it from you, Dave. No, I'm sorry. John's hard to get through to, but, yeah. I'm sorry.

I'm sorry you had to hold for something. No, that's okay. This is the final salute to that part of the past and um yeah i'm a little shocked she won't take a discount but uh you do something fun she's uh she just won't she just i don't know if she would have y'all would have y'all still be married hey you'll do something fun yeah this next month you're gonna write this check um by monday of next week and all right when um april 1st comes around i want you to get uh a checkout and write 3500 and let your new wife see it and then hand it to her i i tell you what as much as you hate

writing that 3500 check every month oh that makes her your new wife skin crawl man Oh, man. Yeah. Yeah. I can hear her yelling shit in the background. That's so great. That would be the best $3,500 you ever spent in your life, man. Yeah, you ought to do something to celebrate that much of your past being in the past. We're already in Myrtle Beach for three months. There you go. Okay. Well, go out to eat and buy you an expensive bottle of wine or something.

But, yeah, write a check, be done with it. There's an amount of peace and closure and finality and all those kinds of things that's going to come when you do this that you can't even anticipate because you're a business guy and you run numbers all the time, and you're not going to catch how emotional this is until you actually do it it's going to be like oh that's really done i'm really done with her she is x yes x x x this has been a very protracted 10-year divorce exactly and and just just the thought of calling and saying

hey i'm gonna write you a check will you take this instead and you're saying no that's like she's still controlling things you know that's the only reason she did it right oh man write the check she actually wanted the money write the check man be free i don't think we've ever done a uh debt free screen divorce free screen but i'm a divorce free screen we could probably do it for you um we uh yeah we do that we do those in the parking lot we do those in the parking lot wow all right cory's with us cory's in salt lake city rails cory this is what happens when you get in towards the end of the show it digresses what's up i really enjoyed listening thank you for taking my call it's a pleasure to talk to you. I hope you're doing better than you deserve as well. We are, sir. Thank you very much. How can we help you, sir?

Well, thank you. So just for a bit of context for you, right now I'm in baby step two, and I'm going to have my car paid off in about the next month. And that will be the last of my debt. Way to go. Thank you. I appreciate that. And then at the end of this year, I'll have baby step three completed or I'm projecting to about $20,000 in my emergency fund. So next year, I'm going to begin my, or I'll resume my 401k investing and putting some money away from my college fund. My question is, my question is we're eventually going to need to get a bigger house to accommodate our growing family. And right now, I have a seven-year adjustable rate mortgage. If I could go back in time, I wish I could take that back, especially with this climate.

But I have what I'm dealt with. But I'd like to do that in the next three to five years just before the adjustable period begins. And at that time, I'll have about $1,000 a month extra in my margin in our budget. And the way I'm seeing it, I have three different options. The first one is I'd like to either put that extra money towards our principal and our existing mortgage, save that in a high-yield savings account, and then withdraw it when the time comes for that bigger house, or take on a bit of more risk or gain potential by investing in a brokerage account.

I was just curious to know what your thoughts were on that. Well, you explained the baby steps to us, which means you have some familiarity with what we teach. Baby step one is $1,000 saved to start an emergency fund. Two is debt-free, except for the house. That's where you're getting ready to be. Three is you need an emergency fund before we do any of this of three to six months of expenses. Once you've got that, then you're in four, five, and six simultaneously.

Four is 15% of your income going into retirement, as you talked about. And five is kids college, as you talked about. And six is pay off your house. And we tell people pay it on the principal. Pay your house off, man. And even if you don't get it paid off, when you sell it, they give you a check for the equity. You didn't lose the money. It's all right there stored in the house. You don't accidentally spend it or accidentally lose it or buy a bass boat with it or anything. It's right there in the house, okay?

And then when the house sells, they give you a check, and you use that check to move up into the next house when you get ready to do that. You're probably going to do that before this seven-year mark hits on this thing. You're probably going to sell it. But you will have reduced the principal, and you've got this nice nest egg then coming out of that house to move on to the next deal. You'll be glad you did that. It's what in the financial counseling world we call a forced savings plan.

Because when you pay down on the mortgage, there's only two ways to get that money out of that house. Refinance or sell it. And both are very cumbersome. Therefore, you will not impulse a bass boat or a 30-day cruise or whatever it is that you're a Porsche. Whatever it is you're getting ready to impulse. Instead, you keep doing smart things with it, which is like getting ready to do the next house. You got a really good thought train going overall, Corey. All we're doing here in this conversation is fine-tuning it.

I'm real proud of you. You keep it up. Our scripture of the day is Ecclesiastes 10.10. If the axe is dull and its edge unsharpened, more strength is needed, but skill will bring success. Dr. Stephen Covey used to talk about sharpen the axe, don't be a tree beater. Abraham Lincoln said that some achieve great success as proof to all that others can achieve it as well. Well, there you go. When you hear a debt-free scream, it should give you hope that you can too.

A brand new event we're doing, Dave Ramsey's Investing Essentials. I'm going to be doing a deep dive into investing. I'm teaching it. It's two hours a night for two nights, a total of four hours, May 21 and 22. It is not a duplicate. It is a series over two nights. It's virtual. It's a live stream.

It's $199, and I'm going to unpack my personal playbook on investing, the principles that I use to decide what I invest in the formulas that I use in real estate how I do my real estate how I do my mutual funds and um and you can learn from that and decide if you want to do it uh the friends that I run with on investing stuff are people of 20 30 50 million dollar hundred million dollar net worth. I know what they do. I know the inside workings of what they do. A lot of them know what I do. And I've learned a lot from people like that. I'm going to share it with you. And this is, so this is not a broke TikTok guy with an opinion. This is a guy who does it. I own several hundred million dollars worth of real estate.

So how did I do that? so we're going to show you and talk about it we're going to do the basics too like 401ks and mutual funds ramsey solutions.com slash events to get signed up this is a live stream 199 dollars may 21 and 22 two hours each night a total of four hours of material george Campbell's going to be in there with me, helping me, and helping you, because he can translate from Dave to human. All right, Ashley is in Houston, Texas. He's fluent in millennial. I guess, yeah, human to millennial, there we go. Ashley's in Houston. Hi, Ashley, how are you? I'm good. How are y'all doing? Better than I deserve. What's up? Oh, yes. So I guess I'll jump into it. I'm very new to this. Like I've been looking into you for like the last three weeks and kind of just started, you know,

learning about my finances and how bad I'm off. So I am on baby step number two. I have $1,000 saved up. Good. Yeah, I was really proud of that. I was really excited. Well, you really are doing it. I mean, this is not, I thought you were just discussing it as theory, but yeah, you're really doing it. You know what it is, you know what baby step two is, you did the first step and it's been only two weeks. Way to go. Yeah, it was really exciting. My husband's proud of me too so um even though we're joint effort of course but um i am i just started calculating my debt a couple days ago i'm 73 000 jointly my husband and i most of it's

student loans um we did just find out though that my husband has a feeling he's probably going to have to have back surgery. He's a stay-at-home dad. He stays home with our three-year-old and our one-year-old. So if he ends up having to do this, I'm going to have to take off work to help him. I mean, it's just what I have to do, and I have to help watch the kids. And the way my work works, I mean, I only have so much PTO about 30 hours and then I'm going to have to kind of pay out of pocket for it. And I'm now I'm anxious. I was excited and now I'm just stressed. Um, I don't know.

How far away is the back surgery? So we're not sure yet. Um, we're just starting to do tests now to see if they are, you know, some things that he's going to be able to do, but it's looking like it's going to have to happen. I mean, he's barely walking these days. Let's not worry about it until we worry about it. So you need to know. I've got a set date in September he's going in for surgery.

Okay? When we know that, what you do is you push pause on the baby steps. Okay. Because you're is you push pause on the baby steps. Okay. Because you're now in emergency mode. You have a serious storm cloud on the horizon. Lightning is cracking. Okay? Right.

Right. So we're going to batten up the hatches. And what that means is we're going to push pause. We're going to be on a very, very, very tight budget. You're going to work as much as you can work. And you're going to sell as much as you can work and you're going to sell as much as you can sell because the bigger the pile of cash you have going into his back surgery the easier this whole thing is going to be right yeah because i don't want to get in any more debt than i already

am no we're not going to get in debt we're going to we're going to put him in all the way in i mean we're going to have a big old pile of cash you're going to use up your pto you're going to have groceries in the cabinets and then when you're able to get when big old pile of cash. You're going to use up your PTO. You're going to have groceries in the cabinets. And then when you're able to get, when he's able to get up and get moving around, you're able to get back to work as soon as possible. Then you can start push play again. And any money you haven't used from this pile, you'll just throw that at the debt and you won't have lost any ground.

Okay. But if you use some of it you will have lost ground right right right but here's a cool here's a cool idea he turns around and is back up and moving and you're back at work before you have to spend a dime of the savings yeah that'd be neat that'd be great yeah i'd be a blessing yeah that'd be a then all the savings you didn't lose a single drop of traction but if you spend two thousand dollars out of ten thousand then you lost that much traction but so what we got his back surgery we're the other side of it and it's not a complete stress point right right don't worry about it until it's you know yeah as soon as you know the date certain

or it looks like sometime in the fall uh you know we're going to do september october the doc comes back and says that and it's a hundred percent chance we're doing it then you push pause and get in i'm piling up cash the bigger the more cash i've got the better i can survive this storm okay and an antidote to the anxiety you feel like sometimes we're anxious about things that we're imagining are coming the thing that's coming at y'all is actually happening right right an antidote to that anxiety is taking every question you have and writing it down and making sure you don't let a doctor visit go by you're giving them a jillion dollars anyway ask every question you have from what's estimated time of recovery what's the cost of this thing going to be start to finish what's the final check we have to write what do

we got to do to make sure insurance covers all of it get all of the data that you need and then you you're not wondering in the middle of the night we have to do this you have to do you'll know no we need to get seven thousand dollars or we need to get 4200 whatever the number is you'll be able to figure it out that's right you you begin to have an actual thing to aim at and not just all over the place what do you know about the insurance coverage you have so my deductibles of 1500 My deductible is $1,500, and my out-of-pocket is $11,000. Okay. So that's our max. Right. Yeah.

So it won't be more than $11,000. So I make $88,000. Okay. All right. And you have currently, you said you have $70,000 in debt? Roughly, yes. Okay. So worst-case scenario, you're the other side of this and including medical if you don't have to have money to eat with you you and you run up eleven thousand dollars out of pocket so now

you're eighty one thousand that's your worst case okay yeah you can do this in one final antidote to anxiety is ask yourself this when you have those scary thoughts in the middle of the night what if it all works out we're real good about um we're real good about asking okay what are we going to do when this goes bad and this goes bad and this goes bad but we rarely stop and say what if this works out i can never say that word catastrophizing catastrophizing yeah is that how you say yeah and that's a i mean our bodies do that to keep us alive i can't say it because i can't do it yeah you're pretty good at it. I'm good at it. Yeah, most of us are pretty good at it.

Dave has a genetic mutation where he doesn't understand catastrophe. It's always going to work out, and it just does. But, yeah, I live in that world, and I've had to learn to ask myself. Wait a minute. Did you just call my parents a name? No. What did you say about a genetic mutation? But the chances of it uh working out ninja

may be great mutant turtle yeah yeah gotta look at the positives of it yeah you're gonna be fine you're gonna be okay actually i appreciate that you lay it out and hey if you're in the middle all this and it gets to freaking you out just give us a call we'll walk you through the numbers okay yeah i'm learning so much honestly in the past three weeks. Because where people get freaked out on all of this is they get down in the trees and they can't see the forest. And so what we do so much of on this microphone is we're just up above the forest and we can just see it real clear because we don't have any fog. We don't have any trees in our way. And if you can stay up above it like that, that's what John's talking about. Then your stress level will be down and your decision-making will be much, much wiser.

So you're in good shape. Pile up cash, pile up cash as soon as you know you're really going to have to do this. That's the answer to the question. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey guys, I'm Rachel. And I'm George.

And you've probably heard our voices before on The Ramsey Show. And do we have a surprise for you. Yep, we have our very own show, Smart Money Happy Hour, where we talk about pop culture, current events, and of course, money. George, it's a great show. And what else do we talk about? So much, Rachel. Not enough, and yet too much. We talk about guilt tipping, because tipping is out of control, and I won't stand for it anymore, which is why I'm sitting. I'm glad you're taking such a stand. And we also talk about something else I'm passionate about, Disney adults. Oh, George. Why is it a thing? Listen, some adults still find the magic. Sure. We also talk about

toxic money traits and girl math. And if you don't know what those are, you have to listen to the podcast. Yeah, there's a lot there, you guys. It's pretty fun. We keep you relevant, is what I'm trying to say. We help you out. So pull up a chair to the happy hour you wish your friends were having. We promise you won't regret it. And if you don't have friends, we'll be your friends. We will. We're great friends. So make sure to check it out on Apple, Spotify, YouTube, or the Ramsey Network app.